That is exactly what it did, made the misery index artificially lower. Unemployment numbers were changed in 1994 when discouraged workers were dropped from the roles of the unemployed. That distorts the unemployment numbers and that is why today's rate is actually 9.36%
So when the number of people leaving the workforce increased before, that made the index higher, but when it increased now, it made it lower. Makes perfect sense. :lol:
Nothing changes the mind of an ideologue.
That was before Frank, Waters, Meeks, etc. got into office and refused to let Fannie Mae and Freddie Mac be reformed.
The House bill, the 2005 Federal Housing Finance Reform Act, would have created a stronger regulator with new powers to increase capital at Fannie and Freddie, to limit their portfolios and to deal with the possibility of receivership.
Mr Oxley reached out to Barney Frank, then the ranking Democrat on the committee and now its chairman, to secure support on the other side of the aisle. But after winning bipartisan support in the House, where the bill passed by 331 to 90 votes, the legislation lacked a champion in the Senate and faced hostility from the Bush administration.
Adamant that the only solution to the problems posed by Fannie and Freddie was their privatisation, the White House attacked the bill. Mr Greenspan also weighed in, saying that the House legislation was worse than no bill at all.
“We missed a golden opportunity that would have avoided a lot of the problems we’re facing now, if we hadn’t had such a firm ideological position at the White House and the Treasury and the Fed,” Mr Oxley says.
Does this mean you wont be changing your mind then?:shock:
I did change my mind, grew up a Democrat and haven't voted for a Democrat President since 1976. Have always been a Conservative but saw the Democrat Party leave me. In other words I grew up and learned that Democrat rhetoric about spending in the name of compassion never led to compassionate spending.
Don’t you find that a bit conflicting to admit that you voted twice for a president that has increased debt as a percent of GDP, (bush +20.7%) while demonizing one (obama +15.4%) that has lower spending as a percent of GDP?:2wave:
Considering the options, no I don't have a problem with that at all. I have absolutely no use for the Obama economic policies and lack of leadership shown by this Administration. Liberals love to use percentage change while ignoring actual numbers. Bush add 4.9 trillion in 8 years or 600 billion a year, Obama has added 4.4 trillion in 3 years or 1.4 trillion a year. Which one cost the taxpayers more money in debt service?
Don’t you find that a bit conflicting to admit that you voted twice for a president that has increased debt as a percent of GDP, (bush +20.7%) while demonizing one (obama +15.4%) that has lower spending as a percent of GDP?:2wave:
Don’t you find that a bit conflicting to admit that you voted twice for a president that has increased debt as a percent of GDP, (bush +20.7%) while demonizing one (obama +15.4%) that has lower spending as a percent of GDP?:2wave:
Was there a housing crisis in the 30 years following the passage of CRA? No. Why not? Because CRA wasn't the problem.
how many times does someone have to tell you that CRA had absolutely NOTHING to do with the sub prime crisis? those regulations didn't force ANY institution to make bad loans. just quit already.
Don’t you find that a bit conflicting to admit that you voted twice for a president that has increased debt as a percent of GDP, (bush +20.7%) while demonizing one (obama +15.4%) that has lower spending as a percent of GDP?:2wave:
Yes, liberals and their voodoo math skills and magical numbers and such. LOL
Too funny.
HUUUUUUGGGGEEE pile of bull****. Increased activity in CRA in 94, 98 and 2002 in response to legislative changes heated up the housing market to the point where it lifted off the Consumer Price Index. Meaning, it went off the pricing rails and exceeded incomes. CRA was the fuel for a decent portion of the default swap market and F&F accounted for around $9 trillion in paper from 2000 to 2007. We were due for a market correction in 2002 for the housing market and it went up for another 5 years after that.
Bull**** indeed!! :lol:
There was no mortgage crisis in '94, '98, or '02. The subprime fiasco really exploded between '02 - '06, and the VAST majority of loans were given out by private lenders who weren't even regulated under CRA. Careful ... you can throw out your back missing the ball by that much!
I dont think thats factual.and the VAST majority of loans were given out by private lenders who weren't even regulated under CRA
Yeah, this isnt misinformed at all. What you are blind to is that you can write more and more as housing prices go up and up. The problem becomes the value isnt intrinsic anymore it becomes part of a postive feedback occurring from writing paper that shouldnt be getting done IE artifically created demand because they couldnt satisfy financial particulars or money down requirements. It takes TIME for that kind of underwriting to implode.
4th largest commercial bank in the US was Washington Mutual and they pledged to write $1billion in CRA type paper in 2004. They were done in 2007. I dont think the facts bear out your opinion. This one just so we are on the same page : I dont think thats factual.
Federal Reserve Board data show that:
• More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
• Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
• Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.
Private lenders—not the government-backed Fannie and Freddie—issued the vast majority of subprime loans, and to low- and moderate-income borrowers in particular. Fannie and Freddie did not guarantee and securitize large quantities of subprime loans. - In fact, Fannie Mae actually lost market share because it chose not to “participate in large amounts of these non-traditional mortgages in 2004 and 2005” because it “determined that the pricing offered for these mortgages often was insufficient compensation for the additional credit risk associated with these mortgages.” As economist Dean Baker stated, “Fannie and Freddie got into subprime junk and helped fuel the housing bubble, but they were trailing the irrational exuberance of the private sector….In short, while Fannie and Freddie were completely irresponsible in their lending practices, the claim that they were responsible for the financial disaster is absurd on its face—kind of like the claim that the earth is flat.” - In testimony before the House Committee on Oversight and Government Reform, Lehman Brothers CEO Richard Fuld acknowledged that Fannie and Freddie’s role in Lehman’s demise was “de minimis,” or so small that it does not matter.
Liberals pooh-pooh the idea that a 30-year-old law could have contributed to the current subprime crisis and credit crunch. But what they ignore is the massive expansion of CRA-commitments forced on banks in the run-up to the 2008 financial crisis.
According to the National Community Reinvestment Coalition, in the first 20 years of the act, up to 1997, commitments totaled approximately $200 billion. But from 1997 to 2007, commitments exploded to more than $4.2 trillion. (Keep in mind this is more than four times the size of the current health bill being debated in Congress.) The burdens on individual banks can be enormous. Washington Mutual, for example, pledged $1 trillion in mortgages to those with credit histories that "fall outside typical credit, income or debt constraints," and was awarded the 2003 CRA Community Impact Award for its Community Access program. Four years later it was taken over by the Office of Thrift Supervision. In 2004 Bank of America ( BAC - news - people ) agreed to provide $750 billion in CRA loans to applicants with poor credit who had previous difficulty obtaining a mortgage. By 2008 Bank of America was reporting that CRA loans represented only 7% of its portfolio but 29% of its losses. Numerous large banks are now in the middle of enormous CRA commitments. In 2004 J.P. Morgan Chase ( JPM - news - people ) agreed to provide $800 billion of such loans over the course of 10 years.
The fact is that Fannie and Freddie were pushed into the subprime market by the private lenders who were taking away their business.
Yeah...your source is...terrible. McClatchy and a hard left echo chamber. Cmon.
A Poisonous Cocktail - Forbes.com
What you are driving at is the percentage of loans serviced. What Im driving at is the orgination of the failed loans and the impact on the banks' balance sheets. Bottom line: the banks with the rosiest CRA investiture got the best rates from the fed, got easy bundling and underwriting assurances from F&F and went to bankrupt or headed to the public trough the fastest. Compliance = bad financial picture. Non-Compliance = stunted growth opportunities but better P&L.
The Commission concludes the CRA was not a significant factor in subprime lending or the crisis. Many subprime lenders were not subject to the CRA. Research indicates only 6% of the high cost loans - a proxy for subprime loans - had any connection to the law. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law. [The Financial Crisis Inquiry Report, January 2011]
We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes. [Federal Reserve, 8/3/11]
Forbes' business is money. When it comes to markets, be it commodities, banking or wall street, they generally are a decent source.
Ive read both of those reports before now. They come under the heading of government based CYA. I find it amusing that someone that is so distrusting of government finds using them as a corroborating source so easy.
I find it hard to believe that $9 trillion in paper going through Fannie and Freddie from 2000 to 2007 is "not a significant factor in subprime lending or the crisis" to quote your article. Actually, I can't believe it at all. Nor should you.
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First, I want to give the credit where it’s due. This is Michael W. Hudson’s story that 60 Minutes appropriated. He found Eileen Foster, the senior executive and fraud monitor at Countrywide Financial, and detailed her story way back in September, including how the company treated her allegations at the time (Foster got fired for her trouble, and Countrywide started concealing the results from their fraud monitoring from the monitors themselves). Hudson has been in front of the mortgage fraud story since his book The Monster detailed the fraud at Ameriquest.
Considering the options, no I don't have a problem with that at all.
Do you have a source for that data?
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