[quote=NYCTrader]

[quote=Shania Twain] [quote=gabe]



But, as any rational person who has worked for a wirehouse or anywhere in corporate America can attest, there are more than enough private sector train wrecks out there. All you have to do is look at any recession to see just how many private sector companies fail miserably at what they do. 2008 showed us how many banks and mortgage companies are garbage. 2000 showed us how many tech companies were garbage. The S&L crisis… I could go on… the list is endless. The fact of the matter is that both governments and private companies are run by human beings. Human beings are not infallible. Some municipal, city and state governments are run quite well. .[/quote]



NYC:   "how many private companies failed miserably…"



You hit the nail RIGHT on the head here and you don’t relize it.   this is EXACTLY why free markets work.   because competition weeds out the DEC, CC, CPQ etc etc and the strong survive and thus you get the best results humans can obtain.



Is it perfect… no.   but it is the best we humans can do.



karl marx sounds AWESOME on paper



and the save the whales types like gabe love it.    IT JUST DOES NOT WORK-PERIOD



HUMANS ARE GREEDY. FLAWED.    ITS REALITY.



GORDON GECKOS speech about “greed is good” is quoted a lot as portraying what wall street is all about



but you know what…and i guess it is sort of sad as a human being but that speech is correct.   It is the system that creates the most for the most number of people.



And it is sad that we are not more advanced to better help each other and share. Its is reality.



Just like MF war is reality. We are still blowing each other brains out.



At the end of the day, we are just human. flawed, original sin.



If you want the best results, human greed must be in the equation. (again, see A. smith and the invisible hand)



   

Shania is correct in almost everything he says on this topic.  Its scary to me that so many of you in the Financial industry are trying to protect Obama, when he could destroy you with some of what he stands for. Sharing the wealth, over spending, and raising tax’s will get us nowhere. Free markets have always worked by letting the successful prosper, and unsuccessful fail.

Democrats, and Republicans acting like democrats, is what got us into this mess. We will get a conservative president like Reagan if Obama keeps it up, as Shania has stated.

Shania you are wrong with the assumption of IT being pussy libs. Atleast in our case.

Out of 10 here in Nashville, 9 of us are conservative.  Most of us voted for for McCain, but hoped Obama would win. McCain would have been the last nail in the coffin for the GOP. With Obama and his extreme views, he is creating a huge backlash in our favor. He will be lame duck status by the end of next year. Some of the people he has surrounded himself with is threatening to our soverienty and freedom.

We need someone to stand up and be a clear leader. There is still not a clear winner in the GOP.

You keep saying you guys in sales. What exactly do you do? Since you disagree with me, please share the cause of our current economic climate in your own words without regurgitating links.

Shania,



Great for you that you did so well. If you think about it it’s a testament to this country that someone who knows so little about how the economy works can do so well in the financial industry! I guess it’s proof that your job simply doesn’t require an understanding of things like subprime. Then again, why should it? As long as you can sell you will do fine.



And you voting Democrat or Republican is, of course, your choice. But what I find surprising is the sheer amount of basic mistakes people like you make about the financial crisis revolving around us. I’m not an FA (came across this board some time ago, when I was looking to hire one) so all I can say is great for you that you can do so well knowing so little!

Free markets have always worked by letting the successful prosper, and unsuccessful fail.


[/quote]
 
Apparently GW Bush and his free market capitalists did not agree with this statement.  Otherwise, they would have let these companies fail without government intervening and facilitating a bailout for the industry and a stimulus package for the economy.  Was this the right decision?  I don’t know.  But it’s pretty telling that the man who for two terms was a staunch backer of free markets and deregulation saw that our economy was so effed that he and his advisors completely abandoned these policies and did a 180. 

It’s easy to say this sht in theory, but in practice no government official (as GW Bush demonstrated) would have the balls to step back and watch as mega cap companies fail.  No way.  Letting Lehman fail was a total disaster.  Imagine if all those other banks were allowed to fail.  Freddie and Fannie?  My God, do you remember how bad it had gotten.  The system was broken.  It’s still broken.  But allowing all these companies to fail was not a viable solution.  Does it suck that we the taxpayer are responsible for bailing out these companies?  Yes.  Is it right?  No.  But what was the alternative?  The alternative was doing nothing and watching a complete effing meltdown of the world’s economy.  Allowing the market to regulate itself would have brought that on.  The irony is the only way to save the free market system was with government intervention.  Should it have come to this?  Absolutely not.   But it did.

Here’s what I would like an answer to: what should have been done?  It’s easy to sit here and criticize government policy, but Obama has inherited a complete clusterf**.  How should have he gone about fixing the problem?
 

[quote=Primo] You keep saying you guys in sales.  What exactly do you do?  Since you disagree with me, please share the cause of our current economic climate in your own words without regurgitating links.[/quote]

The KEY problem (in my opinion) that started this mess is that practically everyone involved (bankers, lenders, buyers, investors) acted as if the prices of houses could never go down on a national scale. Once that happened the whole house came crashing down. It had nothing to do with CRA or Democrats or Republicans although it probably was exacerbated by a trust on markets that bordered on religious belief.

Feel the change ! Feel the change !

[quote=gabe] [quote=Primo] You keep saying you guys in sales. What exactly do you do? Since you disagree with me, please share the cause of our current economic climate in your own words without regurgitating links.[/quote] The KEY problem (in my opinion) that started this mess is that practically everyone involved (bankers, lenders, buyers, investors) acted as if the prices of houses could never go down on a national scale. Once that happened the whole house came crashing down. It had nothing to do with CRA or Democrats or Republicans although it probably was exacerbated by a trust on markets that bordered on religious belief.

[quote=Shania Twain] [quote=gabe]

Please tell me you are joking. Once again, I get it you are a retail salesman but this topic has been analyzed to death in the financial press. Don’t you ever read anything beyond the sports pages?



Let me guess.   

college prof?
IT geek?
DMV?

Classic dem wimp. The losers that got their butts kicked in school.
You hate free markets, because you cant compete.

the subprime melt down was a function of 2 main things;

1. Liberal ideals

“get as many people in homes as possible”

fannie   fdr
fredie   lbj

jimmys “enterprise zones”   
“mandatory” lending to low income people

bubba’s witch doctor loans
etc etc

2. the failure of regulation (government)

government sucks at everything
no different here
911 happened because the FBI and CIA failed

katrina FEMA

on and on

tax code
epa
ira
hud
social security
medicaid
medicare
fema
amtrack
cash for clunckers
etc etc

government sucks

free markets create wealth

retail salesmen?    ok if u like

I made 650 grand last year.    a horrible year.

[/quote]

Here’s something I’ve never understood about right wingers: the implication that any private sector company will always be better run than any public sector agency/state/city/municipality.  It’s this supposed “given” you guys always pull out.  Government sucks.  Business is great.  I don’t buy it.  Sure, government can be a bureaucracy, and there are certainly many well run private sector companies out there.  But, as any rational person who has worked for a wirehouse or anywhere in corporate America can attest, there are more than enough private sector train wrecks out there.  All you have to do is look at any recession to see just how many private sector companies fail miserably at what they do.  2008 showed us how many banks and mortgage companies are garbage.  2000 showed us how many tech companies were garbage. The S&L crisis… I could go on… the list is endless.  The fact of the matter is that both governments and private companies are run by human beings.  Human beings are not infallible.  Some municipal, city and state governments are run quite well.  It’s disingenuous and lazy to assume that government is always bad and private sector is always good.  It’s simply not the case.  As with anything, there is nuance.  But most idealogues don’t get that.  It doesn’t jibe with their lazy and narrow-minded thought process.

CRA had EVERYTHING to do with sub-prime crisis. It reduced standards for lending, making sure everybody was “entitled” to a home. This is a fact. Demand of homes went up, resulting in skyrocketing prices and Home improvement shows.



However, I believe Clinton was a good president. I also believe that GW was a good president.



As for salesmen. If you are not a salesman, how do you get clients? Do they magically appear? Have you done absolutely NOTHING to get clients?



Or do you work at a Fidelity call center?

[quote=Moraen] CRA had EVERYTHING to do with sub-prime crisis. It reduced standards for lending, making sure everybody was “entitled” to a home. This is a fact. Demand of homes went up, resulting in skyrocketing prices and Home improvement shows.



However, I believe Clinton was a good president. I also believe that GW was a good president.



As for salesmen. If you are not a salesman, how do you get clients? Do they magically appear? Have you done absolutely NOTHING to get clients?



Or do you work at a Fidelity call center?



[/quote]



No, CRA has NOTHING to do with the subprime crisis. All the CRA does is say to a bank that if you take deposits in neighborhood A you also need to lend in neighborhood A. it doesn’t say that you have to make zero percent down loans or that you can skip verification of income.



Also, about 50% of subprime loans were made by mortgage service companies, which are not even subject to CRA requirements.



How can you now know any if this? How can you make such basic mistakes, over and over?



As for retail clients, I don’t have any. I’m not an FA.

[quote=gabe] [quote=Primo] [quote=gabe] [quote=Primo] You keep saying you guys in sales.  What exactly do you do?  Since you disagree with me, please share the cause of our current economic climate in your own words without regurgitating links.[/quote] The KEY problem (in my opinion) that started this mess is that practically everyone involved (bankers, lenders, buyers, investors) acted as if the prices of houses could never go down on a national scale. Once that happened the whole house came crashing down. It had nothing to do with CRA or Democrats or Republicans although it probably was exacerbated by a trust on markets that bordered on religious belief. [/quote]

[quote=gabe] [quote=Moraen] CRA had EVERYTHING to do with sub-prime crisis. It reduced standards for lending, making sure everybody was “entitled” to a home. This is a fact. Demand of homes went up, resulting in skyrocketing prices and Home improvement shows.



However, I believe Clinton was a good president. I also believe that GW was a good president.



As for salesmen. If you are not a salesman, how do you get clients? Do they magically appear? Have you done absolutely NOTHING to get clients?



Or do you work at a Fidelity call center?



[/quote]



No, CRA has NOTHING to do with the subprime crisis. All the CRA does is say to a bank that if you take deposits in neighborhood A you also need to lend in neighborhood A. it doesn’t say that you have to make zero percent down loans or that you can skip verification of income.



Also, about 50% of subprime loans were made by mortgage service companies, which are not even subject to CRA requirements.



How can you now know any if this? How can you make such basic mistakes, over and over?



As for retail clients, I don’t have any. I’m not an FA.[/quote]



I’m not making a mistake. You however, continue to show that you can’t even make the smallest of connections. To think that those things are not connected is foolish.



A mortgage underwriter then?

[quote=Moraen] [quote=gabe] [quote=Moraen] CRA had EVERYTHING to do with sub-prime crisis. It reduced standards for lending, making sure everybody was “entitled” to a home. This is a fact. Demand of homes went up, resulting in skyrocketing prices and Home improvement shows.



However, I believe Clinton was a good president. I also believe that GW was a good president.



As for salesmen. If you are not a salesman, how do you get clients? Do they magically appear? Have you done absolutely NOTHING to get clients?



Or do you work at a Fidelity call center?



[/quote]



No, CRA has NOTHING to do with the subprime crisis. All the CRA does is say to a bank that if you take deposits in neighborhood A you also need to lend in neighborhood A. it doesn’t say that you have to make zero percent down loans or that you can skip verification of income.



Also, about 50% of subprime loans were made by mortgage service companies, which are not even subject to CRA requirements.



How can you now know any if this? How can you make such basic mistakes, over and over?



As for retail clients, I don’t have any. I’m not an FA.[/quote]



I’m not making a mistake. You however, continue to show that you can’t even make the smallest of connections. To think that those things are not connected is foolish.



A mortgage underwriter then? [/quote]



No, not a mortgage underwriter.



And yes, you are making a mistake. The subprime crisis is simply not related to the CRA. This has been studied quite extensively.



http://www.newamerica.net/blog/asset-building/2008/no-larry-cra-didn-t-cause-sub-prime-mess-3210



http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html



http://www.thedeal.com/dealscape/2008/11/comptroller_dismisses_claims_c.php



http://www.dallasfed.org/ca/bcp/2009/bcp0901.cfm



http://rortybomb.wordpress.com/2009/06/29/what-was-a-subprime-loan-modeled-on/



http://www.cjr.org/the_audit/a_community_reinvestment_act_r.php





and there are plenty more.

Ah. All non-peer-reviewd journals.





How about the following articles?   You will have to pay for them, unless you are a subscriber:



A Tale of Three Markets - Engel and McCoy



The CRA Implications of Predatory Lending - Engel and McCoy



Reaching the Glass Usury Ceiling: Why State Ceilings and Federal Preemption Force Low-Income Borrowers into Subprime Mortgage Loans; Norton, Anne Balcer



Capital in Chaos: the Subprime Mortgage Crisis and the Social Capital Response; Brescia, Raymond H.



All from peer-reviewed journals and respected economists.



There are more. Unfortunately, these all use empirical evidence with the actual statistics IN the article, not some abstract journalistic pieces.



You might as well have posted a Malcolm Gladwell article.

Moraen,



Every one of the links I provided deals with the myth that CRA was behind the subprime crisis.



I just went to the first one you provided and it says NOTHING about CRA and the subprime. It would be impossible since it’s from 2005! And the second one is from 2002!



Did you just write down a bunch of unrelated stuff?

They are articles in peer-reviewed journals. Did you READ the articles? You shouldn’t even be able to unless you have a subscription, which I do.



Here are some more:



The Role of Congress in the Recession of 2008, D. Cotter



Subprime lending and the Community Reinvestment Act, K Park



Here is one supporting your theory:



CRA Lending and the Subprime Meltdown, E. Laderman



Also, if you look through some of the reader responses to your postings, you will note that they readers who dispute the articles validity, have very good counter-arguments.



You will not convince me that CRA did not pave the way for subprime lending. And I will not convince you of the contrary. Get a subscription to Heinonline and the Harvard Business Review.



They will have articles that will argue both sides. Although the people on my side mostly use a quantitative approach, and those on your side use a more qualitative approach. I will let you decide which one you prefer to use.

I did look at the first two articles. And neither says anything about how CRA supposedly caused the subprime crisis. So they are not relevant to the discussion at hand.





Forget the articles for a second and focus on the analytics. let’s just try to deal with some facts:



1) The CRA ONLY covers depositary institutions. About half of all subprime loans were made by mortgage service companies which are not regulated by CRA. Think of the Ameriquests of the world.



2) The purpose of CRA was to make sure that a bank that took deposits in a neighborhood also lent to that neighborhood. If a bank thought the risk of lending to that neighborhood was bad they could just move elsewhere.



3) The CRA says nothing and mandates nothing that would lead to providing loans with zero down payment. Or interest only loans. Nor did it say anywhere that the lenders had to assume that housing prices would always go up. All those mistakes are what led to the crisis and none came from the CRA. In fact, the CRA was all about long-term solid lending.





If you have an argument that supports your idea that CRA was behind the subprime mess, I’d love to read it. But the links you provided do not support your claim.

The CRA link is in the underwriting standards, once CRA forced changes in those, the mortgage brokers (not covered by the CRA) could sell into populations that otherwise would not have been profitable.

The CRA link is in the underwriting standards, once CRA forced changes in those, the mortgage brokers (not covered by the CRA) could sell into populations that otherwise would not have been profitable.