Science and Technology news... :: View topic - Carter bashes Bush for creating the worst economy. You tel

mike roberts · Guest

http://www.reuters.com/articlePrint?articleId=USTRE4993TS20081010

Ex-president Carter slams Bush on market crisis
Fri Oct 10, 2008 9:09am EDT

BRUSSELS (Reuters) - Former President Jimmy Carter said on Friday the
"atrocious economic policies" of the Bush administration had caused the
worst global financial crisis since the Great Depression of the 1930s.

Carter told reporters on a stopover in Brussels that "profligate
spending," massive borrowing and dramatic tax cuts since President
George W. Bush took office in 2001 were behind the market turmoil and
economic crisis.

"I think it>s because of the atrocious economic policies of the Bush
administration," said the 84-year-old Democrat, who served in the White
House from 1977-1981 during a period of high inflation and energy crisis.

Whoever wins next month>s U.S. presidential election would inherit
economic problems that would force them to postpone implementing some of
their proposed reforms, he said.

"The economic situation is an entrenched problem. It is going to take
years to correct what has been done economically," Carter said, adding
he hoped Democrat Barrack Obama would win and immediately improve
Washington>s image in the world.

Eight years ago, the United States had a budget surplus, low inflation
and a stable, strong economy, he said.

Carter said he was astonished that the United States now owed China "in
the neighborhood of $1 trillion."

Deregulation and what he called a withdrawal of supervision of Wall
Street had encouraged irresponsible elements in the U.S. financial
system, enabling banks to borrow 30 times their value.

Carter was on his way back from a private peace mission to Cyprus with
fellow elder statesmen Lakhdar Brahimi of Algeria and Archbishop Desmond
Tutu of South Africa, intended to give a push to talks between the Greek
Cypriot and Turkish Cypriot leaders on a settlement to reunite the
divided island.

(Reporting by Paul Taylor; editing by Sami Aboudi)

© Thomson Reuters 2008. All rights reserved. Users may download and
print extracts of content from this website for their own personal and
non-commercial use only. Republication or redistribution of Thomson
Reuters content, including by framing or similar means, is expressly
prohibited without the prior written consent of Thomson Reuters. Thomson
Reuters and its logo are registered trademarks or trademarks of the
Thomson Reuters group of companies around the world.
Thomson Reuters journalists are subject to an Editorial Handbook which
requires fair presentation and disclosure of relevant interests.

Guest

On Oct 10, 3:24 pm, mike roberts <m...@verizon.net> wrote:
[quote]http://www.reuters.com/articlePrint?articleId=USTRE4993TS20081010

Ex-president Carter slams Bush on market crisis
Fri Oct 10, 2008 9:09am EDT

BRUSSELS (Reuters) - Former President Jimmy Carter said on Friday the
"atrocious economic policies" of the Bush administration had caused the
worst global financial crisis since the Great Depression of the 1930s.

Carter told reporters on a stopover in Brussels that "profligate
spending," massive borrowing and dramatic tax cuts since President
George W. Bush took office in 2001 were behind the market turmoil and
economic crisis.

"I think it>s because of the atrocious economic policies of the Bush
administration," said the 84-year-old Democrat, who served in the White
House from 1977-1981 during a period of high inflation and energy crisis.

Whoever wins next month>s U.S. presidential election would inherit
economic problems that would force them to postpone implementing some of
their proposed reforms, he said.

"The economic situation is an entrenched problem. It is going to take
years to correct what has been done economically," Carter said, adding
he hoped Democrat Barrack Obama would win and immediately improve
Washington>s image in the world.

Eight years ago, the United States had a budget surplus, low inflation
and a stable, strong economy, he said.

Carter said he was astonished that the United States now owed China "in
the neighborhood of $1 trillion."

Deregulation and what he called a withdrawal of supervision of Wall
Street had encouraged irresponsible elements in the U.S. financial
system, enabling banks to borrow 30 times their value.

Carter was on his way back from a private peace mission to Cyprus with
fellow elder statesmen Lakhdar Brahimi of Algeria and Archbishop Desmond
Tutu of South Africa, intended to give a push to talks between the Greek
Cypriot and Turkish Cypriot leaders on a settlement to reunite the
divided island.

(Reporting by Paul Taylor; editing by Sami Aboudi)

© Thomson Reuters 2008. All rights reserved. Users may download and
print extracts of content from this website for their own personal and
non-commercial use only. Republication or redistribution of Thomson
Reuters content, including by framing or similar means, is expressly
prohibited without the prior written consent of Thomson Reuters. Thomson
Reuters and its logo are registered trademarks or trademarks of the
Thomson Reuters group of companies around the world.
Thomson Reuters journalists are subject to an Editorial Handbook which
requires fair presentation and disclosure of relevant interests.
[/quote]
The foundation for the current economic crisis was laid on senile
Dummy Carter>s watch.

Nobama · Guest

"mike roberts" <mrmr@verizon.net> wrote in message
news:48EFC802.90400@verizon.net...
How the Democrats Created this Financial Crisis
The government engineered mortgage crisis begins here: The Community
Reinvestment Act of 1977, which was passed by a Democrat-led Congress. Who
signed this bill? President James Earl Carter (D-GA).

Banks were forced to make increasingly risky loans to borrowers who wouldn>t
qualify for a mortgage under normal standards of creditworthiness. The
Community Reinvestment Act, made even more stringent during the Clinton
administration, trapped lenders in a Catch-22.

"If they comply," wrote Loyola College economist Thomas DiLorenzo, "they
know they will have to suffer from more loan defaults. If they don>t comply,
they face financial penalties . . . which can cost a large corporation like
Bank of America billions of dollars."

http://tsfiles.wordpress.com/2008/09/22/what-got-us-into-the-mortgage-crisis/

Guest

On Fri, 10 Oct 2008 14:45:20 -0700 (PDT),
TypicalWhitePerson@mailcity.com wrote:

[quote]The foundation for the current economic crisis was laid on senile
Dummy Carter>s watch.
[/quote]

And Bush and the GOP were so incompetent they couldn>t do anything
about it?

Guest

On Fri, 10 Oct 2008 18:04:20 -0400, "Nobama" <NOBAMA @ Hussein.org>
wrote:

[quote]
"mike roberts" <mrmr@verizon.net> wrote in message
news:48EFC802.90400@verizon.net...
How the Democrats Created this Financial Crisis
The government engineered mortgage crisis begins here: The Community
Reinvestment Act of 1977, which was passed by a Democrat-led Congress. Who
signed this bill? President James Earl Carter (D-GA).

Banks were forced to make increasingly risky loans to borrowers who wouldn>t
qualify for a mortgage under normal standards of creditworthiness. The
Community Reinvestment Act, made even more stringent during the Clinton
administration, trapped lenders in a Catch-22.

"If they comply," wrote Loyola College economist Thomas DiLorenzo, "they
know they will have to suffer from more loan defaults. If they don>t comply,
they face financial penalties . . . which can cost a large corporation like
Bank of America billions of dollars."

http://tsfiles.wordpress.c
[/quote]
http://bigpicture.typepad.com/comments/2008/10/misunderstandin.html

« Byron Dorgan on the 1999 Financial Modernization Act | Main | The
Credit Crisis: How We Got Into the Current Mess and How We Can Get Out
»
Misunderstanding Credit and Housing Crises: Blaming the CRA, GSEs
Thursday, October 02, 2008 |

"It>s telling that, amid all the recent recriminations, even
lenders have not fingered CRA. That>s because CRA didn>t bring about
the reckless lending at the heart of the crisis. Just as sub-prime
lending was exploding, CRA was losing force and relevance. And the
worst offenders, the independent mortgage companies, were never
subject to CRA -- or any federal regulator. Law didn>t make them lend.
The profit motive did."

-Robert Gordon, American Prospect

I have been meaning to get back to this issue, but events in the
market have kept me a tad busy.

Making the rounds amongst a certain subset of wingnuts on CNBC, at IBD
and other selfconfoozled folks has been the meme that the entire
housing and credit crisis traces to the the Community Reinvestment Act
(CRA) of 1977. An alternative zombie myth is the credit crisis is due
to Fannie Mae and Freddie Mac. A 1999 article from the New York Times
about the GSE>s role in subprime mortgages has been circulating as if
its the rosetta stone of the credit crisis.

These memes have become a rallying cry -- cognitive dissonance writ
large -- of those folks who have been pushing for greater and greater
deregulation, and are now attempting to disown the results of their
handiwork.

I feel compelled to set the record straight about this
pseudo-intellectual detritus. As we have painstakingly discussed over
the past few years, there were many direct and indirect causes of the
current financial mess.

Let>s clarify the causes of current circumstances. Ask yourself the
following questions about the impact of the Community Reinvestment Act
and/or the role of Fannie & Freddie:

• Did the 1977 legislation, or any other legislation since,
require banks to not verify income or payment history of mortgage
applicants?

• 50% of subprime loans were made by mortgage service companies
not subject comprehensive federal supervision; another 30% were made
by banks or thrifts which are not subject to routine supervision or
examinations. How was this caused by either CRA or GSEs ?

• What about "No Money Down" Mortgages (0% down payments) ? Were
they required by the CRA? Fannie? Freddie?

• Explain the shift in Loan to value from 80% to 120%: What was it
in the Act that changed this traditional lending requirement?

• Did any Federal legislation require real estate agents and
mortgage writers to use the same corrupt appraisers again and again?
How did they manage to always come in at exactly the purchase price,
no matter what?

• Did the CRA require banks to develop automated underwriting (AU)
systems that emphasized speed rather than accuracy in order to process
the greatest number of mortgage apps as quickly as possible?

• How exactly did legislation force Moody>s, S&Ps and Fitch to
rate junk paper as Triple AAA?

• What about piggy back loans? Were banks required by Congress to
lend the first mortgage and do a HELOC for the down payment -- at the
same time?

• Internal bank memos showed employees how to cheat the system to
get poor mortgages prospects approved that shouldn>t have been: Titled
How to Get an "Iffy" loan approved at JPM Chase. (Was circulating that
memo also a FNM/FRE/CRA requirement?)

Caseshillerpricedeclines_2

• The four biggest problem areas for housing (by price decreases)
are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San
Diego, California. Explain exactly how these affluent, non-minority
regions were impacted by the Community Reinvesment Act ?

• Did the GSEs require banks to not check credit scores? Assets?
Income?

• What was it about the CRA or GSEs that mandated fund managers
load up on an investment product that was hard to value, thinly
traded, and poorly understood

• What was it in the Act that forced banks to make "interest only"
loans? Were "Neg Am loans" also part of the legislative requirements
also?

• Consider this February 2003 speech by Countrywide CEO Angelo
Mozlilo at the American Bankers National Real Estate Conference. He
advocated zero down payment mortgages -- was that a CRA requirement
too, or just a grab for more market share, and bad banking?

The answer to all of the above questions is no, none, and nothing at
all.

The CRA is not remotely one of the proximate causes of the current
credit crunch, Housing collapse,and mortgage debacle. As I detailed in
Barron>s, there is plenty of things to be angry at D.C. about -- but
this ain>t one of them.

If you were to ask me to reveal the prime causative factor for the
Housing boom, I would point you to Fed Chairman Greenspan taking rates
to 1%, and then leaving them there for a year. The prime factor in the
bust was nonfeasance on the Fed>s part in supervising bank lending,
allowing banks to give money to people who couldn>t possibly pay it
back.

The root legislative cause of the credit crisis was excessive
deregulation. From exempting derivatives from regulation (2000
Commodities Futures Modernization Act) to failing to adequately
oversee ratings agencies that slapped a triple AAA on junk paper, the
pendulum swung too far away from reasonable oversight. By taking the
refs off of the field and erroneously expecting market participants
could self-regulate, the powers that be in DC gave the players on Wall
Street enough rope to hang themselves with -- which they promptly did.

There are too many people who are trying to duck responsibility for
the current mess, and seeking to place blame elsewhere. I find this to
be terribly important, as we seek to repair the damage amidst an
economic crisis. Rather than objectively evaluate the present crisis
in an attempt to craft an appropriate response, the partisan hacks are
trying to obscure the causes of the current situation. Like burglars
trying to destroy the surveillance tape, they are all too aware of
their role in the present debacle.

Shame on them for their foolishness or cowardice.

Whenever I see a CRA proponent blathering, I have a "Star Trek
moment." That>s when Captain Kirk proves to some random alien computer
that its basic programming is logically inconsistent. It>s the AI
(artificial intelligence) version of cognitive dissonance. The
computer, recognizing the fraud its entire existence was based upon,
seeing the futility of its belief system, at least has the dignity to
blow itself up. No such luck with the wingnuts, who merely move on to
their next piece of spin . . .

"You can fool some of the people some of the time and some of the
people all of the time. That>s usually enough."

-MILTON BERLE

~~~

Note in the Sources section, we have a few subtopics: "Sources" is
what I use to show where data, quotes and charts are from.
"Previously" discusses commentary on this subject we have written in
the past. "Related" is a good jumping off point for further reading;
lastly, Consistently Wrongis where we point out the willfully
misleading tripe written by people who should know better, but publish
nonsense anyway. In the case where it appears some are trying to
mislead the public, the least we can do is call them out.

[quote]
[/quote]
Previously:
A Memo Found in the Street
Uncle Sam the enabler
BARRY L. RITHOLTZ
MONDAY, SEPTEMBER 29, 2008
http://online.barrons.com/article/SB122246742997580395.html
Download A Memo Found.pdf (PDF)

The Ongoing Impact of the Housing Sector
Barry Ritholtz
Investor Insight, Aug 27 2007, 11:50 AM
http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2007/08/27/the-ongoing-impact-of-the-housing-sector.aspx

Real Estate and the Post-Crash Economy
Barry Ritholtz
Thoughts from the Frontline,December 29, 2006
http://www.2000wave.com/article.asp?id=mwo122906

[quote]
[/quote]
Related:
Community Reinvestment Act had nothing to do with subprime crisis
Aaron Pressman
BusinessWeek, September 29
http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html

It>s Still Not CRA
Ellen Seidman
New America Foundation, September 22, 2008 - 9:36pm
http://www.newamerica.net/blog/asset-building/2008/its-still-not-cra-7222

“The Community Reinvestment Act: Thirty Years of Accomplishments, But
Challenges Remain”
Prepared Testimony of Michael S. Barr
Professor of Law, University of Michigan Law School
Before the Committee on Financial Services
U.S. House of Representatives, February 13, 2008
http://tinyurl.com/CRA-Michael-S-Barr-testimony

The GOP Blames the Victim
Capitalism sure is fragile if subprime borrowers can ruin it.
THOMAS FRANK
WSJ, OCTOBER 1, 2008
http://online.wsj.com/article/SB122282690823092989.html

Did Liberals Cause the Sub-Prime Crisis?
Robert Gordon
The American Prospect, April 7, 2008
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis

After the Deal, the Focus Will Shift to Regulation
FLOYD NORRIS
NYT September 28, 2008
http://www.nytimes.com/2008/09/29/business/29norris.html

[quote]
[/quote]
Consistently Wrong:
Don>t Blame the Markets
JERRY BOWYER
NY Sun, April 18, 2008
http://www.nysun.com/opinion/dont-blame-the-markets/74903/

How A Clinton-Era Rule Rewrite Made Subprime Crisis Inevitable
TERRY JONES
INVESTOR>S BUSINESS DAILY, September 24, 2008 4:30 PM
http://www.ibdeditorials.com/IBDArticles.aspx?id=307149667289804

Wingnuttery on CNBC
TBP, Wednesday, September 17, 2008
Michelle Caruso Caberra
http://bigpicture.typepad.com/comments/2008/09/wingnuttery-on.html

IT’S NOT JUST THE LENDERS
There has been plenty of talk about “predatory lending,” but
“predatory borrowing” may have been the bigger problem.
TYLER COWEN
NYT, January 13, 2008
http://www.nytimes.com/2008/01/13/business/13view.html

mike roberts · Guest

Nobama wrote:
[quote]
"mike roberts" <mrmr@verizon.net> wrote in message
news:48EFC802.90400@verizon.net...
How the Democrats Created this Financial Crisis
The government engineered mortgage crisis begins here: The Community
Reinvestment Act of 1977, which was passed by a Democrat-led Congress. Who
signed this bill? President James Earl Carter (D-GA).

Banks were forced to make increasingly risky loans to borrowers who
wouldn>t
qualify for a mortgage under normal standards of creditworthiness. The
Community Reinvestment Act, made even more stringent during the Clinton
administration, trapped lenders in a Catch-22.

"If they comply," wrote Loyola College economist Thomas DiLorenzo, "they
know they will have to suffer from more loan defaults. If they don>t
comply,
they face financial penalties . . . which can cost a large corporation like
Bank of America billions of dollars."

http://tsfiles.wordpress.com/2008/09/22/what-got-us-into-the-mortgage-crisis/

[/quote]
Own up to your party>s mistakes, blunders, and deception.

This crisis happened under Bush>s dismal policies. You must still
believe that Iraq attacked the twin towers on 9/11.
Republicans must stop worshiping this weasel called, "W".

Mason C · Guest

On Fri, 10 Oct 2008 14:45:20 -0700 (PDT), TypicalWhitePerson@mailcity.com wrote:

[quote]On Oct 10, 3:24 pm, mike roberts <m...@verizon.net> wrote:
http://www.reuters.com/articlePrint?articleId=USTRE4993TS20081010

Ex-president Carter slams Bush on market crisis
Fri Oct 10, 2008 9:09am EDT

BRUSSELS (Reuters) - Former President Jimmy Carter said on Friday the
"atrocious economic policies" of the Bush administration had caused the
worst global financial crisis since the Great Depression of the 1930s.

Carter told reporters on a stopover in Brussels that "profligate
spending," massive borrowing and dramatic tax cuts since President
George W. Bush took office in 2001 were behind the market turmoil and
economic crisis.

"I think it>s because of the atrocious economic policies of the Bush
administration," said the 84-year-old Democrat, who served in the White
House from 1977-1981 during a period of high inflation and energy crisis.

Whoever wins next month>s U.S. presidential election would inherit
economic problems that would force them to postpone implementing some of
their proposed reforms, he said.

"The economic situation is an entrenched problem. It is going to take
years to correct what has been done economically," Carter said, adding
he hoped Democrat Barrack Obama would win and immediately improve
Washington>s image in the world.

Eight years ago, the United States had a budget surplus, low inflation
and a stable, strong economy, he said.

Carter said he was astonished that the United States now owed China "in
the neighborhood of $1 trillion."

Deregulation and what he called a withdrawal of supervision of Wall
Street had encouraged irresponsible elements in the U.S. financial
system, enabling banks to borrow 30 times their value.

Carter was on his way back from a private peace mission to Cyprus with
fellow elder statesmen Lakhdar Brahimi of Algeria and Archbishop Desmond
Tutu of South Africa, intended to give a push to talks between the Greek
Cypriot and Turkish Cypriot leaders on a settlement to reunite the
divided island.

(Reporting by Paul Taylor; editing by Sami Aboudi)

© Thomson Reuters 2008. All rights reserved. Users may download and
print extracts of content from this website for their own personal and
non-commercial use only. Republication or redistribution of Thomson
Reuters content, including by framing or similar means, is expressly
prohibited without the prior written consent of Thomson Reuters. Thomson
Reuters and its logo are registered trademarks or trademarks of the
Thomson Reuters group of companies around the world.
Thomson Reuters journalists are subject to an Editorial Handbook which
requires fair presentation and disclosure of relevant interests.

The foundation for the current economic crisis was laid on senile
Dummy Carter>s watch.
[/quote]

Any Rand published Fountain Head in 1945 and Atlas Shrugged in 1957.
The Ayn Rand Collective, which included Alan Greenspan, helped edit Atlas
Shrugged. All well before Carter. It took a while for the disease to incubate.

source: http://en.wikipedia.org/wiki/The_Ayn_Rand_Collective

But it>s true that deregulation started during Carter>s watch.

Mason A. Clark http://frontal-lobe.info
book: Greater America in the Age of Rebellion

Nobama · Guest

<retrogrouch@comcast.net> wrote in message
news:5omve49vvbs8e53a185nenusmrv8alhhuc@4ax.com...
[quote]On Fri, 10 Oct 2008 18:04:20 -0400, "Nobama" <NOBAMA @ Hussein.org
wrote:
[/quote]

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=print

September 30, 1999

Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES

In a move that could help increase home ownership rates among minorities and
low-income consumers, the Fannie Mae Corporation is easing the credit
requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15
markets -- including the New York metropolitan region -- will encourage
those banks to extend home mortgages to individuals whose credit is
generally not good enough to qualify for conventional loans. Fannie Mae
officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation>s biggest underwriter of home mortgages, has been
under increasing pressure from the Clinton Administration to expand mortgage
loans among low and moderate income people and felt pressure from stock
holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been
pressing Fannie Mae to help them make more loans to so-called subprime
borrowers. These borrowers whose incomes, credit ratings and savings are not
good enough to qualify for conventional loans, can only get loans from
finance companies that charge much higher interest rates -- anywhere from
three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the
1990>s by reducing down payment requirements,'' said Franklin D. Raines,
Fannie Mae>s chairman and chief executive officer. ''Yet there remain too
many borrowers whose credit is just a notch below what our underwriting has
required who have been relegated to paying significantly higher mortgage
rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one
study indicates that 18 percent of the loans in the subprime market went to
black borrowers, compared to 5 per cent of loans in the conventional loan
market.

In moving, even tentatively, into this new area of lending, Fannie Mae is
taking on significantly more risk, which may not pose any difficulties
during flush economic times. But the government-subsidized corporation may
run into trouble in an economic downturn, prompting a government rescue
similar to that of the savings and loan industry in the 1980>s.

''From the perspective of many people, including me, this is another thrift
industry growing up around us,'' said Peter Wallison a resident fellow at
the American Enterprise Institute. ''If they fail, the government will have
to step up and bail them out the way it stepped up and bailed out the thrift
industry.''

Under Fannie Mae>s pilot program, consumers who qualify can secure a
mortgage with an interest rate one percentage point above that of a
conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate
that currently averages about 7.76 per cent. If the borrower makes his or
her monthly payments on time for two years, the one percentage point premium
is dropped.

Fannie Mae, the nation>s biggest underwriter of home mortgages, does not
lend money directly to consumers. Instead, it purchases loans that banks
make on what is called the secondary market. By expanding the type of loans
that it will buy, Fannie Mae is hoping to spur banks to make more loans to
people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all
potential borrowers who can qualify for a mortgage. But they add that the
move is intended in part to increase the number of minority and low income
home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic
boom of the 1990>s. The number of mortgages extended to Hispanic applicants
jumped by 87.2 per cent from 1993 to 1998, according to Harvard University>s
Joint Center for Housing Studies. During that same period the number of
African Americans who got mortgages to buy a home increased by 71.9 per cent
and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes
increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag
behind non-Hispanic whites, in part because blacks and Hispanics in
particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by
the year 2001, 50 percent of Fannie Mae>s and Freddie Mac>s portfolio be
made up of loans to low and moderate-income borrowers. Last year, 44 percent
of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating
allegations of racial discrimination in the automated underwriting systems
used by Fannie Mae and Freddie Mac to determine the credit-worthiness of
credit applicants.

Guest

On Fri, 10 Oct 2008 20:31:46 -0400, "Nobama" <NOBAMA @ Hussein.org>
wrote:

[quote]retrogrouch@comcast.net> wrote in message
news:5omve49vvbs8e53a185nenusmrv8alhhuc@4ax.com...
On Fri, 10 Oct 2008 18:04:20 -0400, "Nobama" <NOBAMA @ Hussein.org
wrote:

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=print

September 30, 1999

Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
[/quote]

Too bad it>s unrelated to the problems of Lehman and wall street. Nice
try though:
Misunderstanding Credit and Housing Crises: Blaming the CRA, GSEs
Thursday, October 02, 2008 |

"It>s telling that, amid all the recent recriminations, even
lenders have not fingered CRA. That>s because CRA didn>t bring about
the reckless lending at the heart of the crisis. Just as sub-prime
lending was exploding, CRA was losing force and relevance. And the
worst offenders, the independent mortgage companies, were never
subject to CRA -- or any federal regulator. Law didn>t make them lend.
The profit motive did."

-Robert Gordon, American Prospect

I have been meaning to get back to this issue, but events in the
market have kept me a tad busy.

Making the rounds amongst a certain subset of wingnuts on CNBC, at IBD
and other selfconfoozled folks has been the meme that the entire
housing and credit crisis traces to the the Community Reinvestment Act
(CRA) of 1977. An alternative zombie myth is the credit crisis is due
to Fannie Mae and Freddie Mac. A 1999 article from the New York Times
about the GSE>s role in subprime mortgages has been circulating as if
its the rosetta stone of the credit crisis.

These memes have become a rallying cry -- cognitive dissonance writ
large -- of those folks who have been pushing for greater and greater
deregulation, and are now attempting to disown the results of their
handiwork.

I feel compelled to set the record straight about this
pseudo-intellectual detritus. As we have painstakingly discussed over
the past few years, there were many direct and indirect causes of the
current financial mess.

Let>s clarify the causes of current circumstances. Ask yourself the
following questions about the impact of the Community Reinvestment Act
and/or the role of Fannie & Freddie:

• Did the 1977 legislation, or any other legislation since,
require banks to not verify income or payment history of mortgage
applicants?

• 50% of subprime loans were made by mortgage service companies
not subject comprehensive federal supervision; another 30% were made
by banks or thrifts which are not subject to routine supervision or
examinations. How was this caused by either CRA or GSEs ?

• What about "No Money Down" Mortgages (0% down payments) ? Were
they required by the CRA? Fannie? Freddie?

• Explain the shift in Loan to value from 80% to 120%: What was it
in the Act that changed this traditional lending requirement?

• Did any Federal legislation require real estate agents and
mortgage writers to use the same corrupt appraisers again and again?
How did they manage to always come in at exactly the purchase price,
no matter what?

• Did the CRA require banks to develop automated underwriting (AU)
systems that emphasized speed rather than accuracy in order to process
the greatest number of mortgage apps as quickly as possible?

• How exactly did legislation force Moody>s, S&Ps and Fitch to
rate junk paper as Triple AAA?

• What about piggy back loans? Were banks required by Congress to
lend the first mortgage and do a HELOC for the down payment -- at the
same time?

• Internal bank memos showed employees how to cheat the system to
get poor mortgages prospects approved that shouldn>t have been: Titled
How to Get an "Iffy" loan approved at JPM Chase. (Was circulating that
memo also a FNM/FRE/CRA requirement?)

Caseshillerpricedeclines_2

• The four biggest problem areas for housing (by price decreases)
are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San
Diego, California. Explain exactly how these affluent, non-minority
regions were impacted by the Community Reinvesment Act ?

• Did the GSEs require banks to not check credit scores? Assets?
Income?

• What was it about the CRA or GSEs that mandated fund managers
load up on an investment product that was hard to value, thinly
traded, and poorly understood

• What was it in the Act that forced banks to make "interest only"
loans? Were "Neg Am loans" also part of the legislative requirements
also?

• Consider this February 2003 speech by Countrywide CEO Angelo
Mozlilo at the American Bankers National Real Estate Conference. He
advocated zero down payment mortgages -- was that a CRA requirement
too, or just a grab for more market share, and bad banking?

The answer to all of the above questions is no, none, and nothing at
all.

The CRA is not remotely one of the proximate causes of the current
credit crunch, Housing collapse,and mortgage debacle. As I detailed in
Barron>s, there is plenty of things to be angry at D.C. about -- but
this ain>t one of them.

If you were to ask me to reveal the prime causative factor for the
Housing boom, I would point you to Fed Chairman Greenspan taking rates
to 1%, and then leaving them there for a year. The prime factor in the
bust was nonfeasance on the Fed>s part in supervising bank lending,
allowing banks to give money to people who couldn>t possibly pay it
back.

The root legislative cause of the credit crisis was excessive
deregulation. From exempting derivatives from regulation (2000
Commodities Futures Modernization Act) to failing to adequately
oversee ratings agencies that slapped a triple AAA on junk paper, the
pendulum swung too far away from reasonable oversight. By taking the
refs off of the field and erroneously expecting market participants
could self-regulate, the powers that be in DC gave the players on Wall
Street enough rope to hang themselves with -- which they promptly did.

There are too many people who are trying to duck responsibility for
the current mess, and seeking to place blame elsewhere. I find this to
be terribly important, as we seek to repair the damage amidst an
economic crisis. Rather than objectively evaluate the present crisis
in an attempt to craft an appropriate response, the partisan hacks are
trying to obscure the causes of the current situation. Like burglars
trying to destroy the surveillance tape, they are all too aware of
their role in the present debacle.

Shame on them for their foolishness or cowardice.

Whenever I see a CRA proponent blathering, I have a "Star Trek
moment." That>s when Captain Kirk proves to some random alien computer
that its basic programming is logically inconsistent. It>s the AI
(artificial intelligence) version of cognitive dissonance. The
computer, recognizing the fraud its entire existence was based upon,
seeing the futility of its belief system, at least has the dignity to
blow itself up. No such luck with the wingnuts, who merely move on to
their next piece of spin . . .

"You can fool some of the people some of the time and some of the
people all of the time. That>s usually enough."

-MILTON BERLE

~~~

Note in the Sources section, we have a few subtopics: "Sources" is
what I use to show where data, quotes and charts are from.
"Previously" discusses commentary on this subject we have written in
the past. "Related" is a good jumping off point for further reading;
lastly, Consistently Wrongis where we point out the willfully
misleading tripe written by people who should know better, but publish
nonsense anyway. In the case where it appears some are trying to
mislead the public, the least we can do is call them out.

[quote]
[/quote]
Previously:
A Memo Found in the Street
Uncle Sam the enabler
BARRY L. RITHOLTZ
MONDAY, SEPTEMBER 29, 2008
http://online.barrons.com/article/SB122246742997580395.html
Download A Memo Found.pdf (PDF)

The Ongoing Impact of the Housing Sector
Barry Ritholtz
Investor Insight, Aug 27 2007, 11:50 AM
http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2007/08/27/the-ongoing-impact-of-the-housing-sector.aspx

Real Estate and the Post-Crash Economy
Barry Ritholtz
Thoughts from the Frontline,December 29, 2006
http://www.2000wave.com/article.asp?id=mwo122906

[quote]
[/quote]
Related:
Community Reinvestment Act had nothing to do with subprime crisis
Aaron Pressman
BusinessWeek, September 29
http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html

It>s Still Not CRA
Ellen Seidman
New America Foundation, September 22, 2008 - 9:36pm
http://www.newamerica.net/blog/asset-building/2008/its-still-not-cra-7222

“The Community Reinvestment Act: Thirty Years of Accomplishments, But
Challenges Remain”
Prepared Testimony of Michael S. Barr
Professor of Law, University of Michigan Law School
Before the Committee on Financial Services
U.S. House of Representatives, February 13, 2008
http://tinyurl.com/CRA-Michael-S-Barr-testimony

The GOP Blames the Victim
Capitalism sure is fragile if subprime borrowers can ruin it.
THOMAS FRANK
WSJ, OCTOBER 1, 2008
http://online.wsj.com/article/SB122282690823092989.html

Did Liberals Cause the Sub-Prime Crisis?
Robert Gordon
The American Prospect, April 7, 2008
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis

After the Deal, the Focus Will Shift to Regulation
FLOYD NORRIS
NYT September 28, 2008
http://www.nytimes.com/2008/09/29/business/29norris.html

[quote]
[/quote]
Consistently Wrong:
Don>t Blame the Markets
JERRY BOWYER
NY Sun, April 18, 2008
http://www.nysun.com/opinion/dont-blame-the-markets/74903/

How A Clinton-Era Rule Rewrite Made Subprime Crisis Inevitable
TERRY JONES
INVESTOR>S BUSINESS DAILY, September 24, 2008 4:30 PM
http://www.ibdeditorials.com/IBDArticles.aspx?id=307149667289804

Wingnuttery on CNBC
TBP, Wednesday, September 17, 2008
Michelle Caruso Caberra
http://bigpicture.typepad.com/comments/2008/09/wingnuttery-on.html

IT’S NOT JUST THE LENDERS
There has been plenty of talk about “predatory lending,” but
“predatory borrowing” may have been the bigger problem.
TYLER COWEN
NYT, January 13, 2008
http://www.nytimes.com/2008/01/13/business/13view.html

zzpat · Guest

TypicalWhitePerson@mailcity.com wrote:

[quote]
The foundation for the current economic crisis was laid on senile
Dummy Carter>s watch.
[/quote]
Where>s your proof?

There>s a lot of us who>ve been warning about the crushing debt caused
by tax cuts. When Reagan started this nonsense we had less than $1
trillion of debt. After he cut taxes and increased spending, the debt
soared to an astonishing $2.6 trillion.

Now, in less than one half of one generation, the debt is over $10
trillion and still GOP voters want more tax cuts.

These people are so uninformed and delusional that they should be committed.

We can>t have prosperity when we>re bankrupt...and it was Reagan who
started this idiocy.

--
Impeach Bush
http://zzpat.tripod.com/cvb/

Impeach Search Engine:
http://www.google.com/coop/cse?cx=012146513885108216046:rzesyut3kmm

PALIN GUILTY! · Guest

"zzpat" <zzpatrick@gmail.com> wrote in message
news:gcq89h01ibs@enews2.newsguy.com...
[quote]TypicalWhitePerson@mailcity.com wrote:

The foundation for the current economic crisis was laid on senile
Dummy Carter>s watch.

Where>s your proof?
[/quote]
Watch these people:
http://www.youtube.com/watch?v=KjxzmaXAg9E
http://www.youtube.com/watch?v=VJghQMq49dw&NR=1

[quote]There>s a lot of us who>ve been warning about the crushing debt caused by
tax cuts. When Reagan started this nonsense we had less than $1 trillion
of debt. After he cut taxes and increased spending, the debt soared to an
astonishing $2.6 trillion.

Now, in less than one half of one generation, the debt is over $10
trillion and still GOP voters want more tax cuts.

These people are so uninformed and delusional that they should be
committed.

We can>t have prosperity when we>re bankrupt...and it was Reagan who
started this idiocy.

--
Impeach Bush
http://zzpat.tripod.com/cvb/

Impeach Search Engine:
http://www.google.com/coop/cse?cx=012146513885108216046:rzesyut3kmm[/quote]

Guest

On Sat, 11 Oct 2008 07:41:17 -0700, "PALIN GUILTY!" <pg@ag.net> wrote:

[quote]
"zzpat" <zzpatrick@gmail.com> wrote in message
news:gcq89h01ibs@enews2.newsguy.com...
TypicalWhitePerson@mailcity.com wrote:

The foundation for the current economic crisis was laid on senile
Dummy Carter>s watch.

Where>s your proof?

Watch these people:
http://www.youtube.com/watch?v=KjxzmaXAg9E
[/quote]
STOP SCARING ME!!!

Shit our schools are failing!

>http://www.youtube.com/watch?v=VJghQMq49dw&NR=1

zzpat · Guest

PALIN GUILTY! wrote:
[quote]
Where>s your proof?

Watch these people:
http://www.youtube.com/watch?v=KjxzmaXAg9E
http://www.youtube.com/watch?v=VJghQMq49dw&NR=1

[/quote]
Why don>t you state your proof in your own words instead of having
someone else do the thinking for you?

Do you disagree with the fact that $4 trillion was taken out of the
economy by the US government in less than eight years and that this $4
trillion of debt caused a credit crisis?

You might be a little behind the curve on this issue.

So far this year, the US government has created a staggering $1 trillion
of debt (Jan 1- Oct 10).

--
Impeach Bush
http://zzpat.tripod.com/cvb/

Impeach Search Engine:
http://www.google.com/coop/cse?cx=012146513885108216046:rzesyut3kmm

zzpat · Guest

Nobama wrote:
[quote]
"mike roberts" <mrmr@verizon.net> wrote in message
news:48EFC802.90400@verizon.net...
How the Democrats Created this Financial Crisis
The government engineered mortgage crisis begins here: The Community

[/quote]
Have you ever read the Act you cite. If not, why not?

"Neither the CRA nor its implementing regulation gives specific criteria
for rating the performance of depository institutions. Rather, the law
indicates that the evaluation process should accommodate an
institution>s individual circumstances. Nor does the law require
institutions to make high-risk loans that jeopardize their safety. To
the contrary, the law makes it clear that an institution>s CRA
activities should be undertaken in a safe and sound manner."

http://www.federalreserve.gov/dcca/cra/

Even the Fed says you right wing nuts are lying.

--
Impeach Bush
http://zzpat.tripod.com/cvb/

Impeach Search Engine:
http://www.google.com/coop/cse?cx=012146513885108216046:rzesyut3kmm

Guest

On Fri, 10 Oct 2008 16:58:32 -0700, Mason C
<masoncXXX@XXXfrontal-lobe.info> wrote:

[quote]On Fri, 10 Oct 2008 14:45:20 -0700 (PDT), TypicalWhitePerson@mailcity.com wrote:

On Oct 10, 3:24 pm, mike roberts <m...@verizon.net> wrote:
http://www.reuters.com/articlePrint?articleId=USTRE4993TS20081010

Ex-president Carter slams Bush on market crisis
Fri Oct 10, 2008 9:09am EDT

BRUSSELS (Reuters) - Former President Jimmy Carter said on Friday the
"atrocious economic policies" of the Bush administration had caused the
worst global financial crisis since the Great Depression of the 1930s.

Carter told reporters on a stopover in Brussels that "profligate
spending," massive borrowing and dramatic tax cuts since President
George W. Bush took office in 2001 were behind the market turmoil and
economic crisis.

"I think it>s because of the atrocious economic policies of the Bush
administration," said the 84-year-old Democrat, who served in the White
House from 1977-1981 during a period of high inflation and energy crisis.

Whoever wins next month>s U.S. presidential election would inherit
economic problems that would force them to postpone implementing some of
their proposed reforms, he said.

"The economic situation is an entrenched problem. It is going to take
years to correct what has been done economically," Carter said, adding
he hoped Democrat Barrack Obama would win and immediately improve
Washington>s image in the world.

Eight years ago, the United States had a budget surplus, low inflation
and a stable, strong economy, he said.

Carter said he was astonished that the United States now owed China "in
the neighborhood of $1 trillion."

Deregulation and what he called a withdrawal of supervision of Wall
Street had encouraged irresponsible elements in the U.S. financial
system, enabling banks to borrow 30 times their value.

Carter was on his way back from a private peace mission to Cyprus with
fellow elder statesmen Lakhdar Brahimi of Algeria and Archbishop Desmond
Tutu of South Africa, intended to give a push to talks between the Greek
Cypriot and Turkish Cypriot leaders on a settlement to reunite the
divided island.

(Reporting by Paul Taylor; editing by Sami Aboudi)

© Thomson Reuters 2008. All rights reserved. Users may download and
print extracts of content from this website for their own personal and
non-commercial use only. Republication or redistribution of Thomson
Reuters content, including by framing or similar means, is expressly
prohibited without the prior written consent of Thomson Reuters. Thomson
Reuters and its logo are registered trademarks or trademarks of the
Thomson Reuters group of companies around the world.
Thomson Reuters journalists are subject to an Editorial Handbook which
requires fair presentation and disclosure of relevant interests.

The foundation for the current economic crisis was laid on senile
Dummy Carter>s watch.

Any Rand published Fountain Head in 1945 and Atlas Shrugged in 1957.
The Ayn Rand Collective, which included Alan Greenspan, helped edit Atlas
Shrugged. All well before Carter. It took a while for the disease to incubate.

source: http://en.wikipedia.org/wiki/The_Ayn_Rand_Collective

But it>s true that deregulation started during Carter>s watch.
[/quote]
Along with most of our problems in the middle east.

[quote]

Mason A. Clark http://frontal-lobe.info
book: Greater America in the Age of Rebellion[/quote]


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