Jay Bookman

By Wyld Byll

December 21, 2008 3:20 PM | Link to this

Jay, while there are a few good points in the article, it is apparent that was written by one who has a very limited knowledge of the banking system. Lrt’s chew the fat on three things:

1) India has a huge - and I mean, huge - underclass. Would US credit quality have been better had there been no CRA program and US banks, as with their Indian counterparts, been able to redline the least credit worthy 50% of society.

2) India’s culture puts a tremendous amount of shame upon those who do not pay their debts and the legal system has a rather draconian collection mechanism. In the US, Democrats, led by Frank and Obama, strive to remove the adverse consequences from failing to pay one’s debts. Heck PEOTUS & Frank eve refer to those who cannot pay their debts as victims - I doubt that’s how it works in Indian society. Would US banks have fared better if borrowers understood that there were serious social implications to failing to pay one’s debts or act reponsibly in one’s financial life?

3) India is still, by and large, a third world country. Do you think the central bank’s restrictive credit policies have had anything to do with that.

Jay, does your praise of the subject article indicate that you belive that the US should adopt policies that: a) create an enormous, permanent underclass: b) bring back the scarlet letter and debtors prison for those who do not pay their debts; and 3) adopt restrictive credit policies that limit our economy to third world status.

The NYT article is preposterous, it makes not sense, and it just does not fit.

By getalife

December 21, 2008 3:20 PM | Link to this

Interesting article.

Not sure if they have a broken pay to play government like ours or a no accountability standard but their economic leaders do have common sense.

By Mike

December 21, 2008 3:35 PM | Link to this

Ironically, the most recent bank failure in the US was right here in metro Atlanta — a bank run by Indians.

I guess they quickly adopted our way of doing business.

By AJC/DNC Management

December 21, 2008 4:21 PM | Link to this

Don’t worry, I’m sure that soon enough Oblahmasan will make us into just another India.

Third world leader for a third world country.

ew

By JAY BOOKMAN

December 21, 2008 4:28 PM | Link to this

Byll, do you any real idea what the CRA is, who it affects, how it’s enforced?

It affects only banks, which means high-flying mortgage companies such as Countrywide which originated such a large portion of the bad loans weren’t affected by it at all.

Furthermore, it affects only banks that have branches in lower and moderate income neighborhoods, and it affects ONLY those branches.

All the act requires is that those banks report to the federal government what proportion of deposits from those communities is then lent back to those communities.

Again unlike mortgage companies, CRA-affected banks kept most of their CRA loans on their own books rather than sell them to Wall Street to be securitized. And as we all know, those securitized loans have been where the real problems began.

Furthermore, studies report that the default rate of loans made by CRA-regulated banks has been relatively low.

There is NO requirement or even encouragement for CRA banks to offer subprime or low-doc or no-doc loans. To the contrary, the act explicitly states that banks should follow safe and sound lending practices.

Finally, there is no enforcement of CRA; there is no punishment for “breaking” the CRA. The only impact occurs when a bank with a low CRA rating applies to open new branches or merge or expand. At that point, CRA ratings could become one of many factors in determining whether that application is approved.

The notion among conservatives that such a weak law could bring down the Western economy is ludicrous, which is why you don’t hear anybody in the Bush administration or anybody of any standing in the banking industry make that argument. It is an ideological argument without basis in fact or logic and it is advanced for ideological purposes to:

a. Make poor people the villain, which again is ludicrous. Poor people did not cause this.

b. Distract blame from the real cause, which was rampant and unchecked greed. Greed was a far far greater driver of this calamity than the exceedingly weak requirements of the CRA.

By AJC/DNC Management

December 21, 2008 4:29 PM | Link to this

India doesn’t have Ben Bernake and Timothy Geithner, the Dynamic Dimwits of American finance?

By Pop

December 21, 2008 4:36 PM | Link to this

Jay,

Byll sounds like he learned all he knows from Andy.

By AJC/DNC Management

December 21, 2008 4:56 PM | Link to this

Yeah, in the Pinko Nation, nothing bad happens until it can be blamed on the Republicans-

On Lockhart’s watch, both Freddie and Fannie had plunged into the riskiest part of the market, gobbling up more than $400 billion in subprime and other alternative mortgages. With the companies on precarious footing, Geithner had been advocating that the administration seize them or take other steps to reassure the market that the government would back their debt, according to two people with direct knowledge of his views.

CRA was the demon seed born in the mind of scheming democrats like Bill KKKlinton and Dhimmi Carter.

And no amount of scrubbing will make it go away.

Next up for world history revision, “democrats won the Iraq war, despite Bushie’s errors and mistakes.”

These libs will try anything.

By AJC/DNC Management

December 21, 2008 5:02 PM | Link to this

Check it out, the libs are saying that the people who were able to pay their mortgages are the ones who caused the mortgage crisis, yeah, o.k.

By Taxpayer

December 21, 2008 5:05 PM | Link to this

Jay,

The best thing we could possibly do with our financial system is outsource it to India. We should just shut down companies like AIG, Morgan Stanley, S&P, BofA, etc., and ship all the operations overseas. Any current employees (from CEO on down) seeking jobs should have to submit an application to the appropriate Indian HR representative. Further all contracts for executive compensation should be canceled immediately and let them sue if they don’t like it. I think we should be able to get some interesting jury trials out of it. Now that would be some good reality TV.

By getalife

December 21, 2008 5:08 PM | Link to this

“We can put light where there’s darkness, and hope where there’s despondency in this country. And part of it is working together as a nation to encourage folks to own their own home.” — President Bush, Oct. 15, 2002

D’oh!

By AJC/DNC Management

December 21, 2008 5:17 PM | Link to this

The Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. The Act was intended to reduce discriminatory credit practices against such neighborhoods, a practice known as redlining. 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.

Nothing like some good old government extortion.

By contrast, the 1977 Community Reinvestment Act defines discrimination in terms of loans made to individuals and business borrowers in different areas or neighborhoods, but does not mandate any civil or punitive damages.[7][8][9] The CRA mandates that all banking institutions that receive FDIC insurance be evaluated by the relevant banking regulatory agencies to determine if the institution has met the credit needs of its entire community.

1977, hmmmmmm.

So Bushie was acting on democrat policy.

And yeah boy, I betcha the libs would have been soooo forgiving had he been against it.

By Wyld Byll

December 21, 2008 5:26 PM | Link to this

Jay, thanks for the impassioned responses.

My “bonafides” (which I would gladly provide offline) are substantial and certainly provide more comprehensive knowledge than those articles you have read about CRA - for example, did you realize that Countrywide owns a bank that once held more than $100 billion in mortgages?

Or that CRA regulated banks purchased a large amount of mortgage backed securities that (now we know) held a signifcant portion of problematic mortages without any real regulatory scrutiny beyond the debt rating and ALM impact. Theses purchases were a very important piece of volume in keeping the mortage origination pipeline flowing.

Also, when you state, “There is NO requirement or even encouragement for CRA banks to offer subprime or low-doc or no-doc loans. To the contrary, the act explicitly states that banks should follow safe and sound lending practices.”, it is obvious you have never lived through a CRA exam. In the real world, not Barney Frank’s spin world, you either nake CRA loans of you get dinged, are you truly naive enough to believe that a banker can tell a regulator that he did not find any creditworthy, qualified applicants. CRA is measured by numbers, so a banker must show numbers, not intent.

Finally, while all the “book learnin” (from articles penned by columnists whose experience consists of five days or research rather than 20 years experience in mortgage origination) in the world may tell you that CRA is a paper tiger or that CRA didn’t impact mortgage credit standards, it just ain’t the way the real world played out. The credit origination model at most financial institutions is like a rachet, in that when it moves down, the last transaction that was done becomes the new standard for a loan that will not be declined. Not all the bad loans were CRA loans, of course, but CRA loans played a huge part in pushing down credit standards as defaults were very low during the vibrant Bush administration economy.

Believe me, (on this), I’m no ideologue, just a guy who is frustrated with poor performance by regulators and the liberal apologists who hold these moron regulators and more regulation up as the answer to the current problems.

Regards,

By Taxpayer

December 21, 2008 5:28 PM | Link to this

I’m looking forward to Obama getting in office and implementing some common sense tax policies as well. No more free rides for all these CEOs and executives and their huge bonuses and stock options, etc. No more big corporations and billionaires getting away with tax evasion with their off-shore accounting schemes. It’s time for these greedy, arrogant people to start paying to fix some of their messes.

Further, Madoff should forfeit everything of value except for his clothes and be required to perform community service for the rest of his life. Shoe shine boy and toilet scrubber for all those that he swindled would be amongst his chores.

By GaLiberal

December 21, 2008 5:35 PM | Link to this

The banking failures have their roots in Reagan’s and the Rethuglicons’ poor economic policies. Reagan convinced many that government was the problem and called for those “out dated Depression era laws that stiffled competition” to be repealed. That paved the way for a Rethuglicon controlled Congress to go on a rampage that removed the firewalls between banking and investing. So many of the banks got in on the boom by loaning lots of money then bundled these mortgages and sold them to investors. So much money was tied up in these speculative mortgages that when people defaulted, the investors panicked demanded their money. The banks didn’t have that kind of money on-hand so they went insolvent and closed up. That left the investors holding a bag full of bad loans. Now the taxpayer are holding the bag having to bail out the banks to over $5 TRILLION so the economy won’t completely collapse.

So who will pay for the Rethuglicon’s poor decisions? It won’t be the Rethuglicon politicans that created this mess. It won’t be the bank exectives that got the big paydays (and a fat tax cut from Bush and the Rethuglicons). Nor will it be Reagan or Bush. Or the anti-tax, anti-government, bigoted, homophobic, xenophobic voters that put these Rethuglicons in office. It will be paid back by simply printing more money causing the dollar to devalue which drives up the cost of everything priced in dollars. Like oil. We will all pay by having a reduced standard or quality of living. Whether we like it or not.

When you vote Rethuglicon, you vote against your own best interests. And the banking mess is living proof.

By Taxpayer

December 21, 2008 5:40 PM | Link to this

Further, I look forward to seeing the Obama administration and Congress push through some real regulations governing everything from derivatives to securities along with some real policing of Wall Street and then we can start putting those asinine Republican philosophies such as laissez faire behind us.

By The Corporal

December 21, 2008 6:09 PM | Link to this

Frank Borman: Capitalism without bandruptcy is like Chrisitanity without hell.

By sunshine and thunder

December 21, 2008 6:18 PM | Link to this

JAY

You should stop trying to pretend you understand banks and the CRA. Believe me, you don’t.

Relaxed lending standards from the Clnton era changes in the CRA led to lower standards across the board. A 1992 report by the Boston Fed demonstrated bias in lending. Clinton instructed Reubin to rewrite the CRA and give it more teeth. Which he did.

If you are going to lower the criteria for hi risk borrowers you sure as hell will do the same for someone who may actually pay back the loan.

Especially if you’re making a few thousand dollars on every loan you originate.

Meantime the government is patting you on the back, interest rates are falling, people are refinancing and turning their houses into ATM machines and Fan and Fred have also loosened their standards and bought up lesser quality mortages thus creating funding for more and more of them.

John Kenneth Galbraith in his book “A Short History of Financial Euphoria” Writes that every bubble is characterized by people pointing fingers when it’s over and demanding the government DO something.

When the reality is that “the fault lies not in the stars, Cassius, it lies with us.”

By The Corporal

December 21, 2008 6:25 PM | Link to this

JAY

Can I have a loan?

By getalife

December 21, 2008 6:29 PM | Link to this

We collapsed both economically and politically.

It was bound to happen like the USSR but they recovered and so shall we.

It will take longer than USSR and wingnuts should take this opportunity to break away to Alaska.

Good riddance.

By sunshine and thunder

December 21, 2008 6:40 PM | Link to this

JAY

Since you and Obama are so concerned about the lack of regulation, what are you going to do about the roughly 300 million or so (half of the 600 million total) of unregulated money Obama raked in and spent on TV commercials? (This is after he promised he wouldn’t do that but, instead, would accept public money.)

By JAY BOOKMAN

December 21, 2008 6:54 PM | Link to this

Byll, you write: “Did you realize that Countrywide owns a bank that once held more than $100 billion in mortgages?

Or that CRA regulated banks purchased a large amount of mortgage backed securities that (now we know) held a signifcant portion of problematic mortages without any real regulatory scrutiny beyond the debt rating and ALM impact. Theses purchases were a very important piece of volume in keeping the mortage origination pipeline flowing.”

OK. Now. Explain how any of that makes CRA to blame for this mess. Explain how any of that is relevant.

Nothing in your post changes or even challenges the fact that CRA-driven loans had a very tiny impact in this mess. All the research I’ve seen on the subject — work I have cited in previous posts — says CRA had no impact. To my knowledge, nobody with banking or financial expertise has testified to Congress that CRA was to blame.

If you have research to the contrary or expert testimony to the contrary, please cite it. Otherwise….

By Taxpayer

December 21, 2008 7:00 PM | Link to this

I think if Obama ever screws up and squanders all that unregulated money that taxpayers voluntarily contributed to his election campaign, then he should be held accountable. Too bad we cannot seem to do the same with all the unregulated crooks on Wall Street. Instead of trying to do something to understand what happened on Wall Street and to keep it from happening again and to reign in outrageous executive compensation, etc., some seem to only want to fixate on things like hard working individuals making 30, 40, or 50 dollars an hour at an automotive plant or something equally ridiculous. Anything to divert others away from the truly corrupt and greedy people such as Madoff or any number of Wall Street executives. Anything to try and steer people away from the utter incompetence of the Republican administration and the destructive philosophies of the Republican party.

By AJC/DNC Management

December 21, 2008 7:09 PM | Link to this

A little defense would go a long way.

By AJC/DNC Management

December 21, 2008 7:13 PM | Link to this

Thank you Birds.

By getalife

December 21, 2008 7:17 PM | Link to this

Congrats Falcons for making the playoffs.

By Wyld Byll

December 21, 2008 7:25 PM | Link to this

Ok, Jay, let’s try it a couple ways>

2) I wrote that, “CRA regulated banks purchased a large amount of mortgage backed securities that (now we know) held a signifcant portion of problematic mortages without any real regulatory scrutiny beyond the debt rating and ALM impact. Theses purchases were a very important piece of volume in keeping the mortage origination pipeline flowing.” because you wrote, “CRA-affected banks kept most of their CRA loans on their own books rather than sell them to Wall Street to be securitized. And as we all know, those securitized loans have been where the real problems began. To indicate that the US regulators were remiss in their activities and that, in fact, a good volume of subprime loans made it onto bank or SIV balance sheets because of poor regulation.

2) The original context in which I mentioned CRA (“India has a huge - and I mean, huge - underclass. Would US credit quality have been better had there been no CRA program and US banks, as with their Indian counterparts, been able to redline the least credit worthy 50% of society.”) was not to blame the status of the US financial system on CRA. Rather, my comment, which mentioned CRA in passing, was meant to highlight that the high and mighty Indian bankers on your pedestal don’t face the same pressures US bankers face. In the US, US bankers have to take credit risk in depressed areas. Do you know how the Indian bankers handle depressed areas - they stay out of them.

It seems to me that we have chased a couple of your red herrings, but that you have never addressed my question. Do we want to follow the centralized, highly regulated Indian model that excludes a large portion of the population, where the legal and social systems make outcasts of those who cannot pay their debts, and do you support a banking system capable of funding third world level development?

As to your researh and expert testimony, I’d love to see ‘em. One can go out and get research that shows that smoking is not addictive. Let’s ask sunshine and thunder if he/she is an industry participant as that posters views are pretty clear.

By Taxpayer

December 21, 2008 7:27 PM | Link to this

Change is coming. It’s just too bad that it takes such a crisis to get people’s attention. Without an exchange or equivalent mechanism to provide trading and pricing efficiency and protection to the marketplace, ‘circuit breakers’ could not be ‘tripped’ or implemented to stem the tide of losses. Additionally, the systemic impact could not be quantified and other measures to protect the integrity of the markets and its participants could not occur. Consequently the Securities and Exchange Commission is setting the stage for some level of regulation of the CDS market to address the financial crisis and has asked Congress for explicit authority to regulate the market.

By AmVet

December 21, 2008 7:29 PM | Link to this

That anybody tries to spin this corporate destruction of capitalism into a Democratic vs. Republican issue is just using up valuable oxygen and replacing it with CO2.

These are systemic long-evolving crimes.

Perpetrated by countless men in the private sector with little or no conscience and unfathomable greed, and with the blessings of multiple facilitators in numerous levels of government. Across all boundaries and all parties. Who were duty sworn to uphold justice and prevent criminals from plundering OUR money.

Sure.

Bookman’s right. While you reich-wing radio nuts blather about minutia like CRA (probably because Limberger or Pretty Boy Sean told you to) as always, you can’t see the forest from the trees.

These crooks and swindlers created false value, extracted profits that didn’t exist and then paid the lawyers in Congress and elsewhere to hold them completely inculpable and unaccountable.

On this very blog I have documented seven different levels of corporate and government oversight that did not happen.

Any guesses as to why?

This was/is criminal behavior explained away as “mistakes” and private enterprise incompetence and bureaucratic bungling.

Gangster-capitalism by traitors and enablers who fly that giant Old Glory on the face of that building on Wall Street as though they are great patriots.

Take it down.

GO FALCONS!!!

By Chad Harris

December 21, 2008 7:33 PM | Link to this

What Jay, Nocera and Tom Friedman in his The World is Flat in paperback didn’t highlight:

1) India still has one of the most entrenched caste systems in the country which treats Muslims as below “untouchables.” It also has even more of a stark contrast between haves and have nots. The Muslims are not happy with being treated like dirt.

See: Mubai—Boom Boom Burn Burn Boom!

2) India has the fastes growing rate of HIV infection in the world.

3) India has the largest population of child prostitutes and slavery for the purpose of prostitutes in the world.

4) Indians in India provide the most eggregiously terrible and stupid “tech support” who tell thousands of people the wrong thing like “format the box” when they get to Windows and can’t find their user profile for Dell, HP, and Microsoft. The language barrier and accent is a deal breaker on most of their calls.

By Wyld Byll

December 21, 2008 7:33 PM | Link to this

Amvet-

By Wyld Byll

December 21, 2008 7:36 PM | Link to this

Amvet-

This whole thing was a regulatory failure. I get frystrated when Jay and his kind throw out red herrings like India. Take a look at Atlanta’s own Alphabank - open 32 months - left hand side of the balance sheet is all speculative real estate loans - right hand side of the balance sheet is all hot money - management and board have no lending experience - the problem was caused by poor regulation and the answer is not more of the same, but change in the regulaotrs and the nature of regulation.

By Taxpayer

December 21, 2008 7:42 PM | Link to this

Oops, I missed that error in the article that I linked to in my prior post. The article should have referred to the 55 trillion dollar CDS market — not 55 billion dollar market. However, the error does not impact the main points of the article. Here’s another article that gives some more details on the CDS market.

By The Corporal

December 21, 2008 7:47 PM | Link to this

Here is the root of the whole problem.

Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it? For if he lays the foundation and is not able to finish it, everyone who sees it will ridicule him, saying, ‘This fellow began to build and was not able to finish.’

Luke 14

By Taxpayer

December 21, 2008 7:56 PM | Link to this

There is at least one key difference between casino gambling and CDS trading: Gambling has strict government regulation. The federal government has long shied away from any oversight of CDS. The CFTC floated the idea of taking an oversight role in the late ’90s, only to find itself opposed by Federal Reserve chairman Alan Greenspan and others. Then, in 2000, Congress, with the support of Greenspan and Treasury Secretary Lawrence Summers, passed a bill prohibiting all federal and most state regulation of CDS and other derivatives. In a press release at the time, co-sponsor Senator Phil Gramm - most recently in the news when he stepped down as John McCain’s campaign co-chair this summer after calling people who talk about a recession “whiners” - crowed that the new law “protects financial institutions from over-regulation…and it guarantees that the United States will maintain its global dominance of financial markets.” (The authors of the legislation were so bent on warding off regulation that they had the bill specify that it would “supersede and preempt the application of any state or local law that prohibits gaming …”) Not everyone was as sanguine as Gramm. In 2003 Warren Buffett famously called derivatives “financial weapons of mass destruction.”

By sunshine and thunder

December 21, 2008 8:00 PM | Link to this

The issue certainly is one of democrat vs. republican. Of course there are greedy parties on both sides and of course there is greed on Wall Street.

Many of you act as if that is the only place that emotion is found.

Greed is rampant everywhere. It is a prime motivation for wealth creation (republicans) and also a prime motivation for those who steal that wealth and use it to buy votes (democrats).

As far as the sub prime mess, none of it was the fault of the borrowers, right? I mean one report I saw said that only 70% of the defaulted loans had fraudulent documents initiated by the borrowers.

But the real culprit was the CRA which relaxed lending standards on an insitutional basis. The upshot of that was relaxed lending standards industry wide.

Hypocritical democrats have a lot of ‘splainin’ to do. Of course they won’t and the press won’t pursue anything.

It’s time for ignorant asses to point fingers and blame everyone but themselves. And while they’re at it the IA’s can rant and rave about someone making a lot of money. That’s always good for a few points in class warfare battle.

By AmVet

December 21, 2008 8:00 PM | Link to this

Byll,

Agreed. And one of the first acts performed by President Bush was to cut the funding and manning for the SEC’s oversight protection agency. After campaigning he was going to “clean up Wall Street”.

More than changing the nature of the regulation, what this amazing nation really needs is a collective change of heart. And some basic compassion.

One where these men with concentrated, unregulated wealth and power uphold their moral obligations and ethical responsibilities to their employees, shareholders, community, country and planet.

As well as those who are elected to represent and actually protect us, instead of the crooks.

Look at this past “bailout”. The ultimate insult to the American people. There were NO public hearings. NO gathering of the best minds to find prudent, long-term solutions that represented a consensus of the us — the taxpayers.

It was essentially a closed door deal between the Bush administration and congressional Democrats.

(And it doesn’t even have the teeth to prevent this from happening again!!! Nor will the victims of these thieves and other criminals ever see justice served.)

They shut out and sold out the American people.

Talk about taxation without representation. This time it was perpetrated by the latest King George who governs 50 colonies now instead of the original 13.

But then, we have exactly the government and capitalist system that we want. I first realized this when Reagan got elected. HE wasn’t the problem. The American people were the problem.

Until and unless people demand REAL change (and IMHO that ain’t a corporatist-friendly Obama) and major improvements we have no one to blame but ourselves…

By JAY BOOKMAN

December 21, 2008 8:04 PM | Link to this

Byll, I question your basic premise, which seems to be that the foreclosure/mortgage crisis is based in depressed areas in the first place.

It is not.

Not by a long shot.

What are the three states with the highest foreclosure rates? Nevada (Las Vegas and Reno), California and Florida.

Those aren’t slum properties going into foreclosure, Those are pretty expensive upper-middle class properties going into foreclosure. The banks here in Georgia that are failing — they aren’t banks doing business in the inner city, they are banks that were financing the exurban boom.

You mention Alphabank — great example. More than three-quarters of its loans were in construction and development, NOT in CRA-related loans in depressed areas.

Given that well-documented fact, it’s misleading to pretend our problems are somehow linked to loans in depressed areas. None of the data show that was the source of our problem. Yet rather than address the real problem, the kind of problem that brought down Alphabank, you complain that “In the US, US bankers have to take credit risk in depressed areas. Do you know how the Indian bankers handle depressed areas - they stay out of them.”

This crisis was NOT created by lending in depressed areas.

I agree with your statement about poor regulation. I have heard first-hand stories about regulators being pressured NOT to regulate so the good times could keep on rolling.

If you agree that was the problem, then perhaps we’re not that far apart. But it seems strange for you to complain about red herrings when you keep tossing in remarks about lending to depressed areas and the CRA, which are the biggest red herrings in this conversation.

By Taxpayer

December 21, 2008 8:11 PM | Link to this

Jay,

Have you read the cnnmoney article that I referenced above. It’s worth a thorough read, especially if you have not been keeping up with the CDS market since all this credit crisis began.

By sunshine and thunder

December 21, 2008 8:13 PM | Link to this

We have more regulation all the time and we also have more thieves stealing their way around it.

Pouring money into the SEC is the same as pouring it into a rat hole.

The SEC was told about Madoff years ago and look what happened.

Punish those who commit fraud severely but don’t punish those who are trying to snag a corner of the American dream for themselves and their families.

By ByteMe

December 21, 2008 8:18 PM | Link to this

RealtyTrac of 34242

The above was NOT caused by poor people. It’s the area right off the coast of Sarasota. These are VERY expensive homes. Note how many are in some state of foreclosure. Oversight of mortgage brokers in Florida was non-existent, as it was in many states. As long as sales were good, no one was going to look closely. Most were purchased by speculators looking to make a quick buck… but then the music stopped and there weren’t enough chairs to go around.

By AJC/DNC Management

December 21, 2008 8:26 PM | Link to this

Man, we’re talking about the basics-

What are the three states with the highest foreclosure rates? Nevada (Las Vegas and Reno), California and Florida.

When the government is telling you to lend money to anybody and everybody or else, then they turn right around and buy up the bad loans on treasury guarantees, what else do you expect to have happen?

Ever heard of the Gold Rush??

And now you want to play like this was dreamed up by the banks and rich people?

By getalife

December 21, 2008 8:35 PM | Link to this

Which part of collapse and broken government do you not understand?

You can play the blame game all you want but the fact remains in 2009, all hell breaks loose.

Happy Holidays comrades!

By Frederick Douglass

December 21, 2008 8:44 PM | Link to this

So if black people had just kept on living in tar paper shacks, and shot gun houses, none of this would’ve happened? Well I live in a small town about an hour from downtown Atlanta, and overwhelmingly, the WASP foreclosures out number those OTHER PEOPLE.

By The Corporal

December 21, 2008 8:50 PM | Link to this

Off Topic

“Yeah, absolutely,” Schwarzenegger said in an interview airing tonight on “60 Minutes” on CBS, when asked by correspondent Scott Pelley if he would like to be president.

At the moment, becoming president would be impossible. Schwarzenegger, who was born in Austria and became a U.S. citizen in 1983, is not a natural born citizen of the United States, as required by the Constitution.

This is easy enough to fix. Ignore it.

By The Corporal

December 21, 2008 8:58 PM | Link to this

Headline:

*(CNN) — Before he accepted Barack Obama’s offer to join his presidential ticket, Joe Biden got a promise from Obama: that he would be there for, every critical decision, Biden said in an interview broadcast Sunday.

Now wait a minute. I may be wrong but didn’t he criticize President Bush for not being able to make a decision with Vice President Chaney’s input??

Hummmmm ………, hypocrisy is like a fine wine. It gets better with age.

By Frederick Douglass

December 21, 2008 9:05 PM | Link to this

Its not enough that Schwarzenegger has run CA-LEE-FORN-YA in the ground, you want him to polish off the other 49 too Corporal?

.

By AmVet

December 21, 2008 9:08 PM | Link to this

Go ahead.

Excuse them.

Justify it all.

Your children and grandchildren are ultimately going to foot the bill…

NEW YORK — Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.

The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.

http://newsmax.com/newsfront/executive_bailouts/2008/12/21/164112.html

By chikin little

December 21, 2008 9:10 PM | Link to this

cycles.

don’t believe the hype.

or your sky MAY be falling too.

By Frederick Douglass

December 21, 2008 9:17 PM | Link to this

Biden’s a much older man, imparting wisdom gleaned from years of having gone around the block a time or two, to a younger man. Cheney was supposedly a more intelligent guy, placed in a position to make sure a dim witted guy didn’t destroy the world, ignorance won out.

By AmVet

December 21, 2008 9:33 PM | Link to this

Yes, that elusive smaller government first envisaged by Saint Ronald is coming to fruition. (Ssshh, don’t tell anyone, but he and Bishop Eddie Meese actually made it bigger and more intrusive.)

But not for the fat cat crooks in the military-industrial complex. No sirree.

Who needs regulations?

What corporate oversight?

I don’t see any problems!

And besides, those honest boys on Wall Street and their water (cash?) carriers on K Street got us here and we simply must protect their “interests” if we are to remain in power.

But alas, Ronnie’s trickle down your thigh economics seems to have gone terribly awry.

If there is going to be economic justice in this country, the people will have to demand it. And I’ll guarantee that the plutocracy is not going to give up any control willingly.

Freedom is participation in power. ~Cicero

By sunshine and thunder

December 21, 2008 9:34 PM | Link to this

JAY

Your premise that the sub prime crisis wasn’t confined to low-moderate income areas is true but irrelevant.

The CRA encouraged the relaxing of lending standards and that became prevelant all over the lending industry.

As I said before, even Fan and Fred relaxed their standards. That freed up a ton of money for mortgage loans.

AM VET

No one is excusing anyone. I’m just trying to correct some pretty powerful misunderstanding on the part of a lot of people about how banking and lending work.

They are no less a bewildered herd in the throes of a thundering stampede than any other group.

By Wyld Byll

December 21, 2008 9:48 PM | Link to this

Jay, we’re arguing past each other to a significant extent.

Granted, I belive that CRA (together with unrealistically low historic default rates) played a leading role in loosening mortgage lending and you do not.

I first posted because I was offended by the NYT article’s view of the indian banking system as superior to the US system, problems notwithstanding. My mention od CRA was in passing rather than as a principal cause of the US problems.

Clearly, the Indians serve a far smaller percentage of the general population than the US, the Indians have done far less to develop their country than the US, and, in fact, foreign capital has done more to develop India that its banking system has.

The NYT’s author’s assertion that the Indian banking system is superior to the US is like saying I’d rather drive a Kia than a Ferrari because I can change the Kia’s oil for $15.

The current US problems are largely the fault of a regulatory failure at the FDIC and OCC. The TARP, while not perfect, is heading in the right dirction as it attempts to fix the banking industries problems - a alck of confidence that, among other things, evidenced itsself in the failure of Wachovia. TARP provides sufficent capital to fix the problem, but it is not big enough to fix the liquidity portion of the probem. The only way to fix the liquidity problem at banks is for the FDIC to guaranty all bank deposits for five years. But Sheila Bair is asleep at the switch and worried about the “cost to the deposit fund” even though the ultimate costs are all borne by the same source, the US taxpayer.

By AJC/DNC Management

December 21, 2008 9:50 PM | Link to this

sunshine: Throw the ball deep-

As president of the Federal Reserve Bank of New York, Geithner was a key decision maker in September when the government let Lehman Brothers fail and then, two days later, bailed out the insurer American International Group for $85 billion.

Those decisions proved cataclysmic. The markets and the economy have yet to recover from Lehman’s failure. The bailout of AIG dealt a further blow to the Fed’s credibility - and, by extension, Geithner’s - because it was an abrupt reversal from the no-new-bailouts stance that had applied to Lehman and, initially, to AIG. Together, the decisions showed that several months into the financial crisis, officials lacked the information and the insight to correctly call the shots.

That’s Obama’s new Treasury Secretary, architect of the worst financial disaster in modern history.

The libs can whine and moan about “regulations” all they want but when the “cops” are the ones committing the crime……..

ew

By AmVet

December 21, 2008 10:10 PM | Link to this

This one is bound to upset the armchair climatologist:

WASHINGTON — President-elect Barack Obama’s selection Saturday of a Harvard physicist and a marine biologist for science posts is a sign he plans a more aggressive response to global warming than did the Bush administration.

John Holdren and Jane Lubchenco are leading experts on climate change who have advocated forceful government action. Holdren will become Obama’s science adviser as director of the White House Office of Science and Technology Policy. Lubchenco will lead the National Oceanic and Atmospheric Administration, which oversees ocean and atmospheric studies and does much of the government’s research on global warming.

“It’s time we once again put science at the top of our agenda and worked to restore America’s place as the world leader in science and technology,” Obama said in announcing the selections in his weekly radio address.

The president-elect said promoting science means more than just providing money, but also is about ensuring that facts and evidence are never twisted or obscured by politics or ideology.

(Is he insinuating that is happening now? Westmoreland was right, hes getting pretty uppity)

“From landing on the moon, to sequencing the human genome, to inventing the Internet, America has been the first to cross that new frontier because we had leaders who paved the way,” Obama said. “Leaders who not only invested in our scientists, but who respected the integrity of the scientific process.”

The four scientists will confront challenges in global warming after years of inaction by the Bush administration, which opposed mandatory cuts of greenhouse gas pollution. Last year, former Surgeon General Richard Carmona testified to Congress that top administration officials often dismissed global warming as a “liberal cause” and sought to play down public health reports out of political considerations.

Since 1993, summer Arctic sea ice has lost the equivalent of Alaska, California and Texas, and global warming is accelerating. The amount of carbon dioxide in Earth’s atmosphere has already pushed past the level some scientists say is safe.

They’re not totally at fault of course, but I hold that damned Copernicus and Galileo partially responsible for this junk science…

By The Corporal

December 21, 2008 10:19 PM | Link to this

To Freederick Douglas

1) Regarding :Schwarzenegger

I would never want him to run as a liberal Republican.

I was being sarcastic re: ignoring the Constitution when running for President. That’s all I can say or Jay will censor me.

2) Regarding Biden vs. Cheney

Good comeback! Well done. That’s the kind of exchanges I like instead of just name calling, etc.

By Hillbilly Deluxe

December 21, 2008 10:40 PM | Link to this

In my view the major part of the problem was people trying to get rich shuffling paper instead of producing something. That always leads to problems.

A lot of banks in the last few years have been opened not to serve their communities and customers but to be sold after 3 years to a larger bank for a quick windfall for the original 10 who start it. Legal but not necessarily a recipe for a solid banking system.

Has anybody ever been through a bank merger as a customer where anything good happened for you? I haven’t in the 3 or 4 times it’s happened to me.

By AJC/DNC Management

December 22, 2008 5:50 AM | Link to this

Washington —- As vice president, Joe Biden will oversee an Obama administration effort to find ways of building up the ranks of the middle class, that ambiguously defined segment of society with which most Americans identify.-Urinal/DNC

Yeah, by breaking a bunch of rich people, just another Madoff with a badge.