Money mess not from loans to minorities

That has been the conservative approach to solving problems, they, themselves, have created. Remember the " Welfare King or Queen ", well, now that that straw dog has been knocked down, why not complete the job, and knock down the real Welfare Kings and Queens, the Corporations. They are getting our taxpayer money, by the boat load and having parties with our monies !! The Bush-McCain Republicans have rewarded their cronies and followers with great jobs, great contracts and great healthcare !! Meanwhile, average America is without good jobs, without any good contracts and most dastardly, with out healthcare !! How come, America, these reprobates, the Bush-McCain Republicans can have the best in life, here in our great country, but we, the average Americans must settle for the scraps, for the crumbs, if we are lucky. No, you communist baiters, I'm not talking about redistributing America's wealth, I am asking for a fair shake, for all of America, not just the gluttonous few !!
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.

Thank you for shedding some light, rather than merely heat, on this situation.

The Republicans will always blame the American People first, especially poor Ameriucans. They hate the American people with a passiojn. Nothing angers them more than the notion of helping the American people. if they can blame something on the poor, and especially the poor who are minorities, they will. Their anger and hate for their felllow citizens is all consuming.

Nobody blamed low-income people. They blamed Congress for giving in to politically-motivated legislation that promised every family home ownership whether they could afford it or not. Even if the banks made and churned this loans, the CRA was the mechanism that authorized, encouraged, and enabled them. Don't whitewash CRA by claiming criticism of it - whoever supported or exploited it - is implicit criticism of poor people.

It looks like we got too clever for our own good.
http://www.nytimes.com/2008/10/12/opinion/12dooling.html?em

This will mean nothing to most on the right. It is much easier to blame the minorities. Not to mention it works just great with Obama being 1/2 minority. Once again....it is not truth they seek.....just the office.

NO NO NO Frankie>we don't blame people for taking DEMS up on their poor minoritiy and NINJA loans>that's human nature.

While I respect you for telling the CRA ACORN story (very few libs will)....I don't think you know the part that took place PRIOR TO THERE BEING A CORRUPT FANNIE AND FREDDIE> PRIOR TO THEM GOING DIRTY, the DEMS also FORCED THEM TO START HAVING 50% of their PORTFOLLIO's reflect these bad loans.

This site talks about these bad loans being bundled up and spread out GLOBALLY. Other countries were also doing subprimes in the same way. These loans CAUSED THE BUBBLE along with the housing costs skyrocketing for the rest of us. THESE ASSETS WERE NOT REAL THAT WERE USED AS COLLATERAL WEREN'T REAL.
http://www.youtube.com/watch?v=ivmL-lXNy64

You quote MEDIA MATTERS>

Half a billion dollars a year can purchase a great deal of influence.

The Sandlers certainly know quite a bit about leverage from their savings and loan days.

Among the beneficiaries of their largesse: Air America, ACORN (a group that has very close and long lasting ties to Barack Obama and has a long history of engaging in voter fraud. Citizens for Responsibility and Ethics in Washington (basically a private detective group focused on the private faults and foibles of Republicans), Media Matters, a media watchdog group that engages in harsh partisan attacks against media figures and articles it considers supportive of Republicans). The list goes on and on.

http://www.americanthinker.com/2008/09/how_allies_of_george_soros_hel.html

You see, it didn't matter if they were covered by CRA, because FANNIE AND FREDDIE were forced to get their portfolios reflecting 50% of those bad loans which they couldn't do unless they told everyone they were going to insure them. That opened the door to EVERYONE JUMPING IN ON IT! WHILE THE ACORN GROUPS (with lots of UNION AND CRA AND DEM SUPPORT WERE PUSHING ALL BANKS TO GIVE THESE LOANS along with a sweet donation for them.

STop getting your advice from a financial dem shill.

If you took all the money ever given for loans to naive and unqualified minority home buyers, plus all the welfare money every given to the "welfare queens" republicans despise, it would still not add up to anything near the $700 billion we have just spent bailing out the nation's "best & brightest" on Wall St. We got some mighty crafty white guys in New York making big plans with their welfare checks.

I wonder how may home loans in default are for second/third homes or for property bought on speculation. It seems to me there may be many of these types of loans out there. I know there was a real industry of indivduals buying up property in condominimum and other developments prior to ground breaking where the investor never intended to reside at the property once completed. Rather, the investors would rely on the premise that the property, at time of completion, would be more valuable then their purchase price and they would be able to reap gains off of this speculation. It was easy money in a lot of markets with little or no liability to the investor. If values didn't go up, they'd walk away from the loans and, if necessary, file a personal BK after moving assets to protected repositories. Sweet deal for them. Only problem was this practice lowered the value of others who were buying in as a primary residence. Their vaules dropped as available inventors increased and the slide was on.
I notice McCain wants to buy out all the bad loans not just the ones that affect a primary residence mortgage holder. It would seem, using the McCain criteria, this would affectively rewards these predators.

Frank James you have had way too much Obama kool-aid.

The mortgage crisis was plotted to cause a financial meltdown by Obama and the other crooks in congress...Frank, Reid, et.al. The whole thing is part of a strategy devised by left wing democrats to win an election. It is straight from the socialist playbook.

Fannie and Freddie were the start of it. Add ACORN and the pressure on local banks to lend to unqualified borrowers and the thing snowballed with every shady broker getting in on the action. Greed took over and it fit the purpose of democrats who were repeatedly warned and who ignored and blocked any effort to correct.

So go sell your Obama propaganda somewhere else. We have already had enough of him and he hasn't served a day in the White House!

Yeah,
It's pretty obvious that $1.3 trillion in sub-prime mortgages didn't bring the world economy to it's knees by itself. The $62 Trillion derivatives market, what Buffet called "financial weapons of mass destruction" on the other hand, was big enough to do just that. What were they thinking?

Frank,
Thanks for putting the 'lie' to so much of the FOX news talking points. Most people knew this was not the case, but someone needed to point it out.

I notice McCain wants to buy out all the bad loans not just the ones that affect a primary residence mortgage holder. It would seem, using the McCain criteria, this would affectively rewards these predators.

Posted by: kg123 | October 13, 2008 11:43 AM
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Actually, McCain plans to take the money already set aside for the BAILOUT and he's said he wants use that MONEY FOR PEOPLE WHO COULD AFFORD THE LOANS rather than giving it to WALL STREET. That was we aren't stuck with even more empty houses. I think it's better to have them filled than sit empty. NINJA loans are a differnt matter NO INCOME NO JOB NO ASSETS that were pushed on banks...doesn't matter how low you drop their interest or principle THEY HAVEN'T GOT A DIME TO MAKE A PAYMENT.

Obama balked at that thought. He wants it to all go to WALL STREET....however Biden said that he and Obama supported the principle being dropped while it was still under banks control which would have completed Acorns mission and put the final nail in the coffin of the banks in our country.

I agree with Frank James on one thing. It was not the poor who are to blame. The mortgages in question were those of upper middle class portfolio. The poor guy did not get bailed out. The middle class did so the economy does not collapse and this means banks and more. The middle class guy will stand to lose his 401 plusses. When principal is eaten into by global marketing of other's money, there is certainly unaccountability of banks, and others at fault. The greed factor reigns. And, folk know whey they play with investments that they are putting them at risk. The IRAs and CDs that have not been put into risk plans are safe.
This would more likely mean the little guy. Again, the middle class was robbed while they too went over their heads. No get rich scheme out there that I no of. And, banks and other financial institutions and the gov't thanks to Dems encouraged it.
I worked with some of these loans and saw how they operated and no little guy got a Fannie or a Freddie that I know of to include me.
And the Dems worked it so that everyone who did not get a Fannie or Freddie could also become part of home ownership, even with selling homes without land (Community Dev) and HUD, etc. It's nice to offer homes to the poor (and? even when?unsafe?; yes they did!), but when the risk factor is there to begin with, it's is doomed from the start.
There is a formula when you go to buy a home and that is how much home you can afford by what you make minus loans, etc. Real estate firms pushed folk to the limit and folk bought over their heads and a lot of them most willingly. Now what do you think would happen eventually? Folk got the house, got a new car, maxed out credit cards and had it all and then one day the rate changes, things changed, and they just could not afford to even fix the water heater.
The greed got out of hand.
Everyone was in on this; everyone!!!
I bought less and almost did not get a mortgage but you know what, I could fix the place up and afford my monthly mortgage. And, that was not even easy then for our family. I was pushed to buy up. I did not and now own my home and have sold it.
A little savvy with some rules and regs out there could help.
McCain is not responsible for the dereg as being the reason for this mess. It goes much further. There were lots of programs and things out there that caused this.
All things are not equal.
And what is a common man??? The poor man?? No one is picking on the poor man here. For twas the middle class and the upper middle class that parlayed into getting more that they could not afford along with the brokers and the banks.
Has nothing to do with minorities. Frank, you just love using race don't you along with the poor for vote affluence. Wow.
Loss of middleclass stability teeter-tottered and could not survive the mess they bought into and willingly at times.
The Dems wanted to play Santa Claus but when the dolls they hand out fall apart, it's the Republicans fault.
Egad.
Ohh well, Obama can fix it. He is going to just tax the rich and we are going to have Christmas everyday.
Be gone. I'll vote with practicality and go with McCain!
There ain't no gravy train out there!

People simply do not understand CRA at all. It in no way required banks to make loans to less qualified applicants. Quite the opposite. It addressed a situation where banks were making loans to less qualified applicant's based on what neighborhood the applicant lived in. Relining was a policy whereby the banks refused to loan to applicant's in certain neighborthood (historically minority) no matter how good their credit and ability to pay. The banks were lending to less qualified applicants (generally white) and refusing to lend to more qualified applicants based not on ability to pay, but on the unrelated matter of geographic location. The CRA required the banks to use the same criteria, based on ability to pay, for giving loans in the entire service area their branches covered.

In the words of Barak Obama,"If you put lipstick on a pig its still a pig!" As you say,"loans were given to millions of people who could'nt afford them" and we should not blame them, for defaulting we should blame international "hot money".
WOW. and they gave the Nobel Prize to Krugman instead of you.... such injustice makes me mad.
We need you to repeat this on SNL where most of your readers get their ecomomic facts

This site explains how the subprime loans are connected to the unwinding of the derivatives. It also explains the changes in the market and how few people understand derivatives ...here is a portion of the site>

... the subprime prime loan crisis is intimately connected to the unwinding of the derivatives market. Specifically, loans were repackaged into derivatives called collateralized debt obligations (or "CDO's") and sold to both big and regional banks and investment companies worldwide. The CDO's were highly-leveraged -- many times the amount of the actual loans. When the subprime loan crisis hit, the high leverage magnified the fallout, and huge sums of CDO derivatives became essentially worthless.

http://www.myprops.org/content/The-Derivatives-Market-is-Unwinding-372335/

I don't recall it being reported that it was only minorities who got these loans, they were simply reported as loans made to people who couldn't afford them, heck that could be anyone!

Right after 9/11 the Federal Reserve Bank (FRB) cut its interest rates and kept them very low for years. This resulted in three very bad consequences.
*
The first bad consequence was inflation. When the FRB makes money, it makes it out of thin air. Pooling all that air-made money in banks meant that all of our hard earned money became worth that much less. Big money interests had first use of this money without the rise in prices caused by the inflation. [It is only after the first use of inflated money that the market responds by demanding more dollars for products and services.] The rest of us just had the value eaten out of our savings when prices rose in response to the inflated money supply.
*
The second bad consequence was that the availability of all that cheap money to banks discouraged savings. Interest rates one could earn by investing in cash fell with the FRB's lending rates. Banks had no need to pay higher interest rates to depositors when they could get the money cheaper directly from the FRB.
*
The third bad consequence - which is really the immediate cause of the trouble we see today - was the moral hazard created by an excess of money (via the FRB) and illusory investment opportunities in unregulated (or under regulated) markets. This is, in principle, no different than the problem created during the 1920s by the FRB's intentional inflation of the money supply. The only difference is in the application. In the early 20th Century, banks lent a lot of money to borrowers who invested in the stock market and commodities, layering debt upon debt to leverage their positions. Laws enacted in the meantime prevent those practices. In the 21st Century, however, banks and mortgage lenders succumbed to lowering real estate lending standards to make a profit on all the excess, cheap money. This time, when the real estate bubble burst (for a number of reasons), lenders found themselves losing money on these risky loans because of their inability to re-sell foreclosed property at high enough prices (or even at all in some areas). That bled into other markets because real estate derivatives (a.k.a. OTC Mortgage Backed Securities) depend on the payment of interest and principal on underlying loans for their return value. Bundling risky loans into MBSs made investments into those securities a lot riskier than investors expected or deserved. With all the unsold and foreclosed property piling up and generating no monetary return, a lot of that derivative paper has taken a major hit in value. One can only appreciate the magnitude of the problem by realizing that the dollar figure of all outstanding real estate loans (good and bad) comes to many trillions of dollars.
*
So, no, the CRA didn't really cause the problem. Nor was the problem caused by the existence of Mortgage Backed Securities or the particular deregulation of the banking industry from 1999 until now. And, no, it is not the fault of either the Democrats or the Republicans. So stop it already with the cheap rhetoric. If one can lay the primary blame at the foot of any person or institution, my vote would be to blame the Federal Reserve Bank for furnishing all the cheap money which made the moral hazard in lending possible in the first place. My second exercise in finger pointing would be to blame the banks for first succumbing to the temptation to lower real estate lending standards, and then for allowing the resulting loans to get bundled into MBSs. (And, no, the banking deregulation did not change these standards.)
*
But the question remains: What are we going to do about this? The first answer is long overdue: Either replace the Federal Reserve Bank or create a mechanism for government oversight over its decision making process. The unregulated and unaccountable activities of the FRB have been the cause of most of our financial woes for as long as it has existed. Next, we have to prohibit the bundling of mortgages into derivatives unless they meet minimum risk avoidance criteria. Otherwise, MBSs simply don't deserve the ratings that credit rating agencies have given them. Third, we need to prevent banks from making risky loans, and the FDIC needs to go after those that have. In the event we do not have strict enough regulations in lending, it's time to draft some. Fourth, we need to set up a mechanism to liquidate real-estate or rehabilitate the loans of creditworthy lenders in order to return value to what we call "toxic paper." Buying up the toxic paper will just lose money and fail to address the underlying problem. (It's kind of like stepping on a land mine to let another soldier off the hook. This is why most of the bailout is a bad idea.) Fifth, and finally, we need to resolve to stop overextending ourselves. That applies to the federal government as much as it does to the rest of us. In a crisis like this, the best the government can do is cut spending, consumption and taxes; and encourage savings. That means the FRB must be made to substantially raise its lending rates. The bailout and other efforts to buy up banking interests is just so much kerosene on the fire, and will only serve to prolong the misery.

And today, Obama gave a great speech detailing his plans to help the world's economy recover. And the stock market made its greatest gain in history. This man can really cover his bases. I don't know what's going to be better. Watching the republipigs go down in flames, or watching the Democrats save the world and doom the republipigs to a lifetime of irrelevance!

CRA and ACORN both need to go BYE BYE. They never should have existed....they were the begining of this entire BANKING COLLAPSE. YOU DO NOT LEGISLATE BANKS TO GIVE OUT LOANS THAT PEOPLE DO NOT QUALIFY FOR, you do not force Fannie and Freddie to carry 50% of their portfolio in these questionable loans>

> The Community Reinvestment Act (CRA) was passed into law by the U.S.
> Congress in 1977 (CARTER) as a result of national grassroots pressure
> (LIberal Fascists) for affordable housing, and despite considerable
> opposition from the mainstream banking community. Only one banker [in
> the entire U.S.], Ron Grzywinski from ShoreBank in [south side]
> CHICAGO, testified in favor of the act.

> The largest and oldest community development financial institution is
> ShoreBank, headquartered in the South Shore neighborhood of Chicago.

> In 1985, Ron Grzywinski worked closely with then Arkansas Governor
> Bill CLINTON to set up the Southern Development Bancorporation.http://en.wikipedia.org/wiki/Ron_Grzywinski

> CLINTON later credited ShoreBank’s success with inspiring a movement
> of community development financial institutions (CDFI’s).http://en.wikipedia.org/wiki/Community_development_financial_institution

> In a 1992 speech, CLINTON called ShoreBank “the most important bank in
> America." [Indeed!]

> In addition to ShoreBank, Ron Grzywinski currently works with the
> board of the Aga Khan Foundation in PAKISTAN

> In 1995, as a result of interest from President CLINTON's
> administration, the implementing regulations for the CRA were
> strengthened by focusing the financial regulators' attention on
> institutions' performance in helping to meet community credit needs.

> The 1995 revisions were credited with helping to substantially
> increase the amount of loans to small businesses and to low- and
> moderate-income borrowers for home loans. Part of the increase in the
> latter type of lending was no doubt due to increased efficiency in the
> secondary market for mortgage loans. The revisions allowed the
> securitization of CRA loans containing SUBPRIME mortgages. The first
> PUBLIC SECURITIZATION (Socialism- your taxes!) of CRA loans STARTED IN
> 1997.
> (...)
> Changes to tests conducted on the Intermediate Small category were
> viewed by some as decreasing the institutions' obligations to meet
> lending requirements of low- and moderate-income households. Racial
> inequities in mortgage acceptance rates (as reported by Inner City
> Press, the National Community Reinvestment Coalition, ACORN [see
> below] and other groups) are cited as a primary reason to maintain or
> even increase the scope of the CRA.

http://groups.google.com/group/rec.radio.shortwave/msg/bb053a55c4e6d96c

And here is a link to a Miami-Dade press release where little johnny mcBUSH was the proud HEADLINE speaker at an event sponsored by.... (wait for it)... ta da ... ACORN!

http://www.mdc.edu/Home/Press/rally.htm

THIS VIDEO WILL SHOW YOU IN HIS OWN WORDS THAT OBAMA HAS A PLAN TO LET THE COMMUNITY ORGANIZER ACORN and ALL THE REST OF THE ORGANIZER RADICALS IN ON EVERY DECISSION HE PLANS TO MAKE FOR OUR LIVES, and look at them celebrate....look at the last part of the video (damn spookie) as THE MESSIAH is being praised for having gotten the GULLIBLE YOUTH ON BOARD>

http://www.youtube.com/watch?v=QfXqW-uN4vw

Frank, please get it together ! ! ! !

"as THE MESSIAH is being praised for having gotten the GULLIBLE YOUTH ON BOARD>"

Why do the old folks at the McCain Campaign hate the youth so much? We're young and we're going to vote. If that bothers you, too bad. It''s your generation that got us in this mess. We'll end up apying for your generation's greed and irresponsiblty. We inherit your deficit, we inherit your pollution, so don't presume to lecture us. WE are the solution to the problem that is your generation.

This a typical Republican plan, cut taxes for the rich and hope that they will invest their money. It is trickle down economics -- good old Herbert Hoover's solution to the 1929 Depression. Franklin Roosevelt wanted an immediate fix by funneling money to working people through spending on the infrastructure and creating jobs. His approach was that a healthy base would spend money, and it would trickle up. By cutting taxes for the rich you are helping the same greedy people that got us into the mess. Old myths never die and new ones are invented to keep them alive. For instance, the lie that providing poor people with mortgages caused the breakdown in property values. No, speculation did. Crooked bookkeeping did. The real estate bubble was a creation of the real estate industry and Greenspan who promoted it by continuously lowering the interest rates -- discouraging Americans from saving (the rates were too low) and encouraging them to borrow on their homes and invest them in stocks. McCain, the financial genius, wanted to privatize social security, and continue the Bush policies of stealing from the poor to give to the rich.

Swamp Posts and Replies for Tuesday, October 14, 2008.doc

* * * * *
Posted by: rodolfo f. acuna | October 14, 2008 11:33 AM
*
Rodolfo,
*
I am afraid your knowledge of history is a bit flawed. Hoover's plan to get us out of the depression did not involve supply side economics. With the help of the Federal Reserve Bank, Hoover's main efforts were directed at job creation, job protection and supporting industry's ability to keep jobs afloat. His direct focus was to pump money into the American Main Street. Franklin Delano Roosevelt largely continued Hoover's domestic policies.
*
And you know what? None of it worked. Even F.D.R.'s alphabet soup failed miserably in alleviating our economic troubles. In fact, both Hoover's and F.D.R.'s attempts at pumping more new money into the system made the depression last longer - because they permitted bad businesses and bad economic positions to remain unliquidated.
*
We did not recover from the Great Depression until we entered World War II. The relief occurred because the federal government enlisted all the great captains of industry to produce the means of war - and those great captains put everyone back to work. Call that supply side economics if you like, but it worked. The reason it worked lies in the fact that the government didn't just give money to industry; it demanded production. The demand for production assured job creation on a massive scale.
*
This should have provided the insight that seems to elude our leaders. Supply side economics work when there is some guarantee that industry will spend money given to it (or spared from taxes) on job creation. The problem lies in the fact that we cannot maintain a wartime economy during peacetime. However, there are other things the government can do to insure money "trickles down" (which they haven't done). If, for example, the tax codes had indexed the availability of tax cuts to businesses only for new job creation - or for how many people they kept employed in the United States - then industry would have had a strong motive to spend that extra money on keeping people employed.

young and naive>it's not youth that bothers me and it's not CHANGE that bothers me. I'm the same age as the candidate you plan to vote for, you know...the old dude ha.

The problem I have is seeing Farrahkan all excited that they were able to use their MESSIAH to pied pipper a bunch of unknowledgable people....youth, who UNLIKE THE CONSERVATIVE YOUTH, don't read up thoroughly on their CANDIDATE!

DO YOU KNOW ABOUT ACORN and their part in subprime loans, do you know how they screwed the poor and the rest of us for DUBIOUS REASONS, do you know the history of their founder Wiley destroyed welfare in the same way ACORN deliberately flooded the banking system to, did you know that RATHKE Acorn founder belonged to the same SDS that AYERS DID?

DO YOU KNOW ABOUT BLACK LIBERATION THEOLOGY, did you know Obama said he knew nothing about Rev Wright speaking that way even tho the good REV said he preached it for 20 years OBama went there?

COME ON MAN, WE ALL LOVE CHANGE BUT EDUCATE YOUR YOUTHFUL SELF AND THEN VOTE!