Posted on 07/09/2015 8:44:23 PM PDT by 2ndDivisionVet
Not denying your point - plenty of politicians had blood on their hands over this - but I’m still waiting to find a BANKER that thought it was wrong to loan money to people they knew, FULL WELL, could never pay it back.
Bingo.
The “Community Redevelopment Act” forced banks to issue loans to people who couldn’t pay.
[So don’t blame repeal of Glass-Steagall; it was social engineering that caused the crash.]
You’re right about that, but what the repeal did do is allow banks to merge across regions. This allowed for monopolistic and anti-trust practices (terms the current administration and Dodd-Frank have totally ignored) making mega-banks that unscrupulously invest depositor funds and are “too big to fail”. Meaning we get to bail them out ad-infinitum for their poor investment practices.
Privatize profits, socialize liabilities, no consequences. All brought to you by the Clinton crime machine. If Glass-Steagall breaks up the mega-banks and delineates “investment banks” from “savings banks” I’m all for it.
I’m telling you they had to do it.
I guess I deserved that, after quoting German to you the other day. ;^)
What a great point you make about Glass-Steagall being a dead letter before its official repeal.
Doing away with that would certainly be a big step in the right direction.
I doubt it. To do so would go against all that is Government.
The mere names "Elizabeth Warren" and "John McCain" are enough to discredit any bill!
"Mit der Dummheit kämpfen Götter selbst vergebens"
-- Friedrich von Schiller, The Maid of Orleans.
The current English translation is, "There's no cure for stupid." ;^)
BTW I have 90 minutes of Gustav Gründgens' "Faust" which I copied from a Goethe Center cassette, that I listen to a lot.
That is *real* poetry -- beautiful language and not at all obscure. And it's natural language, not artificial.
I especially like "Vom Eise befreit sind Strom und Bäche..." and "Verlassen hab' ich Feld und Auen..."
This is not quite entirely where the problem resides. While the CRA deserves opprobrium, the truth is that the collapse of the housing market and subsequent panic was actually fueled by backside as well as frontside [CRA] pressure on housing sales and instruments.
Bankers were willing to loan unqualified recipients the sums they were loaned not only because they were coerced into doing it, but because they knew perfectly well that they would not be holding the note when the bill came due. Quasi-government secondary mortgage financiers Fanny Mae and Freddie Mac effectively turned bankers into brokers by sucking up their bad notes [In effect, bankers simply collected closing fees in exchange for arranging secondary financing.] Strongly implied, but never stated, was that because of their relationship to the US Government, FM2 were backed by the full faith and credit of the United States. This made derivative buyers much more comfortable with bundled real estate "securities."
The moral hazard created by disconnecting the people arranging a loan from the people actually liable for it was what created the bubble, and had very nothing to do with the repeal of the Glass-Steagall act.
Many of these bad loans were made under banking regulations that existed before 1999. Even with Glass-Steagall in place there has never been anything stopping a "commercial bank" from underwriting a bad loan. And the courts ruled as far back as 1978 that Glass-Steagall did not stop a "commercial" bank from selling or securitizing mortgages.
This is completely a red herring, and if Elizabeth Warren is behind it, you can bet it's a recipe for more government control.
“I’m telling you they had to do it.”
I agree - I’m well aware of the CRA and other legislation, but unless you can show me otherwise, they certainly seemed to have NO PROBLEM with what they were doing.
They need to BE IN JAIL.
They do not need to be in jail for following the law that was strictly enforced by the Feds, with the assets of their employers at risk.
What kind of a tin-horn authoritarian state do you want us to become?
I worked with banks at the time, and only the few I knew the very best would confide anything about it to me—completely and deeply off the record. They were forced to bad loans year after year after year. They were essentially just giving money away. BUt they couldn’t afford to in any way be seen to be objecting to it.
And, of course, you had the various shakedown groups ready to hold protest on bank executives’ lawns at any time, too.
I figured you were one of them, thanks for letting me know.
Conversation over...I don’t spend time with people that have a personal interest in a particular issue.
No politicians are thinking that easy loans are the way to kickstart the economy.
Because I worked with banks years ago?
Or maybe because you thoroughly lost an argument making claims you know nothing about.
Exactly so...
;-)
Nothing personal, but when there was a thread about doctors asking little kids if there were guns in their homes EVERYONE was outraged, except two people - who thought it was not the business of the government to regulate what is said in doctor’s offices.
They then outed themselves as a nurse and a doctor.
So, again, NOTHING PERSONAL, but I simply won’t debate people that have some kind of career connection to an issue, as it often TOTALLY BLINDS them.
I have no ties to the medical field, and I agree that the government has no place regulating what gets done in doctors’ offices like that.
But I hope in your depth and width of business understanding you realize that almost every business sector in the US works on some level as a supplier to the vast financial services sector.
If you won’t take any information from anyone with any knowledge in the field under discussion, well, you’re just hopeless from the perspective of intellectual argument.
And ad hominem attacks are never strong.
Not sure I attacked you for just being an insider...but one trait that I have seen is that insiders tend to personalize policy issues...and that is why I don’t bother with insiders. I am willing to hear them, but I’m not willing to debate them - they simply look at outsiders as arrogant idiots, regardless of the merits of the debate.
Enjoy the weekend, though.
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