Comments on: The Bailout http://joemullins.com/archive/2008/09/22/the-bailout.php Because hard drives are cheaper than therapy Wed, 01 Feb 2012 23:24:05 +0000 hourly 1 http://wordpress.org/?v=3.1.4 By: Joe http://joemullins.com/archive/2008/09/22/the-bailout.php/comment-page-1#comment-8160 Joe Wed, 08 Oct 2008 20:40:40 +0000 http://joemullins.com/?p=704#comment-8160 <p>Here's a good newsweek story on this topic.</p> <p>http://www.newsweek.com/id/162789</p> Here’s a good newsweek story on this topic.

http://www.newsweek.com/id/162789

]]> By: Joe http://joemullins.com/archive/2008/09/22/the-bailout.php/comment-page-1#comment-8039 Joe Tue, 07 Oct 2008 00:03:34 +0000 http://joemullins.com/?p=704#comment-8039 <p>I'm assuming you're talking about changes to the Community Reinvestment Act, but even if not, it's most likely lack of regulation that drove the problems, not too much. Bob Barr testified before congress that only 20% of subprime loans originated in banks subject to the CRA, and Janet Yellen, CEO of the federal reserve bank of San Francisco noted that almost all of the CRA loans were low value, not the higher priced loans that drove the crisis.</p> <p>To quote Bob Barr: "More than half of subprime loans were made by independent mortgage companies not subject to comprehensive federal supervision; another 30 percent of such originations were made by affiliates of banks or thrifts, which are not subject to routine examination or supervision, and the remaining 20 percent were made by banks and thrifts."</p> <p>Congress didn't "do this", they simply allowed it.</p> <p>Now I certainly think that congress played its part in all this, largely by bowing to lobbyist pressure not to regulate financial markets, but there's plenty of blame to go around here. Home buyers, mortgage brokers, banks, realtors, all of them took part in a bad game where ultimately taxpayers will be footing the bill.</p> <p>But I think it's a little crazy to start blaming those darned poor people for trying to buy houses they couldn't afford. This was a crisis of the aspiring middle class.</p> <p>I could go on to say how this is a thinly veiled appeal to the latent racism that's long been used to pit the middle class against the poor, but I'll save that argument for another day.</p> I’m assuming you’re talking about changes to the Community Reinvestment Act, but even if not, it’s most likely lack of regulation that drove the problems, not too much. Bob Barr testified before congress that only 20% of subprime loans originated in banks subject to the CRA, and Janet Yellen, CEO of the federal reserve bank of San Francisco noted that almost all of the CRA loans were low value, not the higher priced loans that drove the crisis.

To quote Bob Barr: “More than half of subprime loans were made by independent mortgage companies not subject to comprehensive federal supervision; another 30 percent of such originations were made by affiliates of banks or thrifts, which are not subject to routine examination or supervision, and the remaining 20 percent were made by banks and thrifts.”

Congress didn’t “do this”, they simply allowed it.

Now I certainly think that congress played its part in all this, largely by bowing to lobbyist pressure not to regulate financial markets, but there’s plenty of blame to go around here. Home buyers, mortgage brokers, banks, realtors, all of them took part in a bad game where ultimately taxpayers will be footing the bill.

But I think it’s a little crazy to start blaming those darned poor people for trying to buy houses they couldn’t afford. This was a crisis of the aspiring middle class.

I could go on to say how this is a thinly veiled appeal to the latent racism that’s long been used to pit the middle class against the poor, but I’ll save that argument for another day.

]]> By: Dad http://joemullins.com/archive/2008/09/22/the-bailout.php/comment-page-1#comment-8035 Dad Mon, 06 Oct 2008 23:07:49 +0000 http://joemullins.com/?p=704#comment-8035 <p>Don't forget that in 1994 that Congress mandated lending institutions not discriminate in loans to the public. They later mandated that civil penalties be imposed on companies that refused to make these low income loans available to virtually everyone. It was unreasonable to expect people to pay these loans. Most were ARMs that ballooned payments as interest rates rose. Congress did this - not the greedy banks and loan institutions, but they did make a lot of money. You'll note they immediately bundled these loans and sold them to someone else.</p> Don’t forget that in 1994 that Congress mandated lending institutions not discriminate in loans to the public. They later mandated that civil penalties be imposed on companies that refused to make these low income loans available to virtually everyone. It was unreasonable to expect people to pay these loans. Most were ARMs that ballooned payments as interest rates rose. Congress did this – not the greedy banks and loan institutions, but they did make a lot of money. You’ll note they immediately bundled these loans and sold them to someone else.

]]> By: Nic http://joemullins.com/archive/2008/09/22/the-bailout.php/comment-page-1#comment-7165 Nic Mon, 22 Sep 2008 22:35:59 +0000 http://joemullins.com/?p=704#comment-7165 <p>This whole bailout is so incredibly bad for my blood pressure.</p> This whole bailout is so incredibly bad for my blood pressure.

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