The Stimulus Bill

[checkthisout]

Originally Posted by BobR

That's quite a quote. Can you give a reference to any founding document that states that our interests should be placed under submission to the people's government?

Honestly, it sounds like something you would expect to find The Redbook - Wikipedia, the free encyclopedia.

If something is necessary for the overall well-being of society it should not be at the whim of private powers to do with it whatever they see fit, it's good stewardship must be assured by the people's government.

Deregulation in the form of the Gramm/Leach/Bliley act allowed Banks to speculate with other people's money and use our financial system for their own personal selfish gain.

The only solution is reregulation and bringing the system back under the control of the people's government in order to insure good stewardship of our money.

Originally Posted by BobR

One could easily make the claim that a good chunk of our current mess resulted from too much, rather than too little regulation..

Yes but then one would actually have to come up with open and checkable facts to show how and why they arrived at that conclusion. Such a person would be unable to do so which would mean the person is just spinning fantasies.

Originally Posted by BobR

The government created a moral hazard by promising to back up questionable mortgages..

That is not regulation. That is a sign of government agency that has been corrupted by the people it is supposed to be regulating.

Originally Posted by BobR

and flat out pressured lenders to lower their lending standards..

Where on earth are you coming up with this crap?

Originally Posted by BobR

This created a situation where there was no downside to the risky loans that went under but big gains to be earned for the risky loans that managed to make the payments (at higher rates than a preferred customer would pay). No wonder the lenders did things that in hindsight look risky and foolish. Now the taxpayer is going to have to clean up the mess.

I agree with this statement but disagree with your assertion as to the cause.

Deregulation through the Gramm/Leach/Bliley act once again allowed Investment Banks, your Neighborhood Banks (depository institutions) and Insurance companies to interact AGAIN.

Regulations seperating these institutions were brought about by the Great Depression since securities fraud and speculation were found to be one of the main causes.

Deregulation means that your insurance companies and neighborhood banks are now exposed to the same risky speculative endeavors that only investment banks were allowed to make for umpteen thousand years.

A simple quick-read of history proves that lack of regulation and seperation of our depository institutions from the Wall Street casinos will result in financial catastrophe. Republicans spearheaded this deregulation.

Originally Posted by Senator Phil Gramm

"In the 1930s, at the trough of the Depression, when Glass-Steagall became law, it was believed that government was the answer. It was believed that stability and growth came from government overriding the functioning of free markets.
"We are here today to repeal Glass-Steagall because we have learned that government is not the answer. We have learned that freedom and competition are the answers. We have learned that we promote economic growth and we promote stability by having competition and freedom. "I am proud to be here because this is an important bill; it is a deregulatory bill. I believe that that is the wave of the future, and I am awfully proud to have been a part of making it a reality."

Thanks Phil, we owe ya one.

[BobR]

Originally Posted by checkthisout

Where on earth are you coming up with this crap?

I had to look really hard. It was the very first thing that popped up when I Googled "Community Reinvestment Act".

From the first paragraph of Community Reinvestment Act - Wikipedia, the free encyclopedia :

The Act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation. (See full text of Act and current regulations. To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions.

So the CRA regulators would "encourage" lenders to lend to people in their community. That doesn't sound too bad.

The next sentence has teeth: If the lenders did meet the regulator's definition of "meeting the needs of local communities", they could very well be turned down applications for new bank branches, mergers, etc.

How is that for regulation? You better meet your quota of loans to people with BAD CREDIT or you may find yourself unable to open up that new branch across town.

Is this the type of regulation that you think we need more of?

[drcampbell]

Neither the Community Reinvestment Act of 1977 (which was only applicable to regulated lending institutions) nor the regulated lending institutions themselves were ever at the core of the problem. The main problem originated with unregulated mortgage brokers who wrote mortgages they never intended to hold and Wall Street investment houses who bundled mortgages into securities and then traded them - neither of which would have been permitted under Glass-Steagall.

After Glass-Steagall and prior to the Gramm-Leach-Bliley Act, it was very unusual for a mortgage to ever be upside-down. Now your house and its mortgage are commodities on Wall Street and half the purchase price can be siphoned away. Enjoy deregulation.

[checkthisout]

Originally Posted by BobR

How is that for regulation? You better meet your quota of loans to people with BAD CREDIT or you may find yourself unable to open up that new branch across town.

?

Can you point to where this act says Banks have to lend to people with poor credit?

The crux of the bill is to prevent redlining.

You are a victim of the spin machine that sat around a table and came up with the rhetoric they were going to spray during the blame game for this scheme when it blew up in their face. If what you are saying is correct, the system would have disintegrated during the Reagan years, it would not have waited until now.

Of course at this point I would probably get better receptiveness talking to a brick wall.



BOB, The crux of the regulations put in place during the depression was to limit the amount of money people could make off of money without investing in or inventing something tangible that would be useful for society.

When you deregulate banking, all you end up with is unaffordable interest rates or debts that outrun what society could ever possibly repay and you get more people into debt which hurts the creative powers of society.

You have entire cities full of people who do nothing but shuffle paperwork for bankers. They do absolutely nothing productive leaving the rest of the blue collar workers to support them. As these large financial entities get larger they become more and more parasitic to the working people of this country until the point at which the actual productive industry itself disintegrates due to being unable to hire the right people to do the work, invest in R&D etc at which point the entity disintegrates and the goods then get imported from foreign countries that believe slave labor and unbridled pollution are ok.

Sound Banking regulation prevents this from happening.

History has proven it.

Things will still be "unequal" in the eyes of some but picture Henry Ford rich VS JPMorgan.

Which one made society better?

[AK_Gandy]

Originally Posted by BobR

You better meet your quota of loans to people with BAD CREDIT or you may find yourself unable to open up that new branch across town.

You completely ignored this part of your own quote..

".......consistent with safe and sound operation."

It wasn't CRA that made the bankers loan to bad credit risks.

It was the dollar signs swimming in the bankers eyes.

They knew they could mix them in with good loans and then turn around and unload them because the rating companies didn't have a clue what was actually in the 'derivative.'

.

How is that for regulation?

Is this the type of regulation that you think we need more of?

You've made one heck of a leap to think that this is any kind of regulation.

Let me guess................you got it from Limpbaugh?

.

[LMJD]

It wasn't CRA that made the bankers loan to bad credit risks.

It was the dollar signs swimming in the bankers eyes.

Wrong again. Your source, other than personal opinion? My source is from someone who was in banking admin for 30+ years and her bank and their branches were informed as per CRA regs that they WILL make X% number of their loans to what they referred to as NINJA borrowers--No Income, No Job, no Assets. Sorry, but those "money hungry" loan officers and bank managers had no choice.

[AK_Gandy]

Originally Posted by LMJD

Wrong again.

Yes, you are.

You are banking (nice pun...eh? ) on anecdotal evidence from a single "source" who would love to blame someone else for her/her banks own mistakes.........and trying to pass it off as fact?

Yeah right.

......her bank and their branches were informed as per CRA regs that they WILL make X% number of their loans to what they referred to as NINJA borrowers--No Income, No Job, no Assets. No Income, No Job, no Assets. Sorry, but those "money hungry" loan officers and bank managers had no choice.

Prove it with statistics......not what someone you know said.



In the meantime, educate yourself.

CRA didn't "cause" the sub-prime mess
(click here)




I also posted this a while back that takes a critical view of all of the actions/people that contributed to the crash. It covers all aspects and attempts to actually dig into the many facets of the problem.

But..........if you insist on taking a simplistic view that blames a single entity/action, I guess it won't matter how many facts you are shown.

25 People To Blame
(click here)


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