“so called” act : since it was an actual act, even from its title, and your logic begins with writing off the fact, does your post have any valid point to make at all?
Is this sentence the extent of your rebuttal?
Your comment about Wall Street creating instruments out of thin air is the real problem here. It’s not the CRA or any of this other stuff.
Look at AIG. You hear on the news all week that AIG couldn’t go under because they sold billions in “credit default swaps”. What are credit default swaps? Essentially insurance that investors could buy that stocks/bonds of companies they owned wouldn’t go belly-up.
Now I understand the absolute need for things like insurance to pay for medical bills, to replace your house if it is hit by a tornado or for life insurance. But was it really wise to have a bunch of these Wall Street firms start taking bets from investors to provide “insurance” that a company would have good credit?
Sure I understand that having that type of insurance can make markets more “efficient”. But in reality, all we’ve done is write up a bunch of worthless paper contracts that people then relied on to the tune of trillions of dollars.
I realize at the heart of things our whole system is based on confidence and fiat money but Wall Street, with Washington’s full approval (or at least lack of interference) took the whole concept of “belief in the system will hold this up” and pushed it to the ends of the earth with derivatives. And this was all done in the past 15-years at an exponential pace.
That’s our problem right now.