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The financial sector did not want to make bad investments that caused a recession. They were forced to knowingly make hundreds of thousands of fraudulent loans

by MaysonL 13y ago

The financial sector did not want to make bad investments that caused a recession. They were forced to knowingly make hundreds of thousands of fraudulent loans? (Loans on which they profited mightily, personally and corporately) As far as the bailouts go, look at the players in the decisions to give them. It looks a hell of a lot like the finance industry gave itself the bailout, out of the national treasury.

gaius 13y ago
They were forced to knowingly make hundreds of thousands of fraudulent loans? Yes. Why do you think everyone was so keen to sell the mortgages they had written on? Because everyone knew they were bad of course! But they were compelled to write them by the Community Reinvestment Act passed by Clinton.
- dctoedt 13y ago
  > But they were compelled to write them by the Community Reinvestment Act passed by Clinton. That's directly contrary to the conclusion of a bipartisan government commission that investigated the subprime mortgage crisis: "...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 high-cost loans—a proxy for subprime loans—had any connection to the law." [1] Indeed, CRA-induced loans had a far-lower default rate: "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." [1] Even the dissent by three Republican commission members agreed, "Neither the Community Reinvestment Act nor removal of the Glass-Steagall firewall was a significant cause. The crisis can be explained without resorting to these factors." [1] [1] http://en.wikipedia.org/wiki/Government_policies_and_the_subprime_mortgage_crisis#Conclusions_of_the_Financial_Crisis_Inquiry_Commission http://en.wikipedia.org/wiki/Government_policies_and_the_sub...
  - gaius 13y ago
    Then why play musical chairs?

by MaysonL 13y ago

gaius 13y ago

They were forced to knowingly make hundreds of thousands of fraudulent loans? Yes. Why do you think everyone was so keen to sell the mortgages they had written on? Because everyone knew they were bad of course! But they were compelled to write them by the Community Reinvestment Act passed by Clinton.

dctoedt 13y ago
> But they were compelled to write them by the Community Reinvestment Act passed by Clinton. That's directly contrary to the conclusion of a bipartisan government commission that investigated the subprime mortgage crisis: "...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 high-cost loans—a proxy for subprime loans—had any connection to the law." [1] Indeed, CRA-induced loans had a far-lower default rate: "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." [1] Even the dissent by three Republican commission members agreed, "Neither the Community Reinvestment Act nor removal of the Glass-Steagall firewall was a significant cause. The crisis can be explained without resorting to these factors." [1] [1] http://en.wikipedia.org/wiki/Government_policies_and_the_subprime_mortgage_crisis#Conclusions_of_the_Financial_Crisis_Inquiry_Commission http://en.wikipedia.org/wiki/Government_policies_and_the_sub...
- gaius 13y ago
  Then why play musical chairs?