In hindsight, who is most to blame for the Financial Crisis?

[briansd1]

[quote=sdduuuude][quote=Zeitgeist]Greed.[/quote]

Greed can’t be the problem. It exists in both good and bad times.[/quote]

Yes, greed always existed. But regulations keep greed in check.

Greenspan unleashed greed believing that institutional self-preservation could replace regulatory oversight and would contain the greed.

Greedy individuals who made money creating those the toxic debt still have their personal fortunes.

[briansd1]

[quote=SK in CV]
If you’re somehow arguing that Fannie and Freddie are to blame for the current mess, you need to review what happened over the last 5 years. The percentage and dollar value of non-GSE loans skyrocketed. The GSE’s stayed relatively flat in comparison.[/quote]

You’re correct.

To further underscore that FAN/FRED, and the Community Reinvestment Act (I assume that’s the one since Hobie mentioined Jimmy Carter) were NOT part of the problem, you just need to look at the commercial real estate market.

The commercial market experienced an even greater bubble and there’s no CRA involved.

There may be other problems with CRA but it didn’t cause the 2008 financial crisis.

In commercial real estate, strategic default by savvy business people is a given considering that there’s no emotional or family attachment to a home.

[briansd1]

[quote=SK in CV]
If you’re somehow arguing that Fannie and Freddie are to blame for the current mess, you need to review what happened over the last 5 years. The percentage and dollar value of non-GSE loans skyrocketed. The GSE’s stayed relatively flat in comparison.[/quote]

You’re correct.

To further underscore that FAN/FRED, and the Community Reinvestment Act (I assume that’s the one since Hobie mentioined Jimmy Carter) were NOT part of the problem, you just need to look at the commercial real estate market.

The commercial market experienced an even greater bubble and there’s no CRA involved.

There may be other problems with CRA but it didn’t cause the 2008 financial crisis.

In commercial real estate, strategic default by savvy business people is a given considering that there’s no emotional or family attachment to a home.

[briansd1]

[quote=SK in CV]
If you’re somehow arguing that Fannie and Freddie are to blame for the current mess, you need to review what happened over the last 5 years. The percentage and dollar value of non-GSE loans skyrocketed. The GSE’s stayed relatively flat in comparison.[/quote]

You’re correct.

To further underscore that FAN/FRED, and the Community Reinvestment Act (I assume that’s the one since Hobie mentioined Jimmy Carter) were NOT part of the problem, you just need to look at the commercial real estate market.

The commercial market experienced an even greater bubble and there’s no CRA involved.

There may be other problems with CRA but it didn’t cause the 2008 financial crisis.

In commercial real estate, strategic default by savvy business people is a given considering that there’s no emotional or family attachment to a home.

[briansd1]

[quote=SK in CV]
If you’re somehow arguing that Fannie and Freddie are to blame for the current mess, you need to review what happened over the last 5 years. The percentage and dollar value of non-GSE loans skyrocketed. The GSE’s stayed relatively flat in comparison.[/quote]

You’re correct.

To further underscore that FAN/FRED, and the Community Reinvestment Act (I assume that’s the one since Hobie mentioined Jimmy Carter) were NOT part of the problem, you just need to look at the commercial real estate market.

The commercial market experienced an even greater bubble and there’s no CRA involved.

There may be other problems with CRA but it didn’t cause the 2008 financial crisis.

In commercial real estate, strategic default by savvy business people is a given considering that there’s no emotional or family attachment to a home.

[briansd1]

[quote=SK in CV]
If you’re somehow arguing that Fannie and Freddie are to blame for the current mess, you need to review what happened over the last 5 years. The percentage and dollar value of non-GSE loans skyrocketed. The GSE’s stayed relatively flat in comparison.[/quote]

You’re correct.

To further underscore that FAN/FRED, and the Community Reinvestment Act (I assume that’s the one since Hobie mentioined Jimmy Carter) were NOT part of the problem, you just need to look at the commercial real estate market.

The commercial market experienced an even greater bubble and there’s no CRA involved.

There may be other problems with CRA but it didn’t cause the 2008 financial crisis.

In commercial real estate, strategic default by savvy business people is a given considering that there’s no emotional or family attachment to a home.

[Allan from Fallbrook]

Brian: Uh, yeah, regarding CRA:http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

And before you accuse me of any sort of partisanship, that’s Thomas DiLorenzo writing on LewRockwell.com, a decidely non-GOP friendly website.

While SK might attempt to argue that CRA’s intent was to use proper lending guidelines and standards, the exact opposite happened (on a government program! Imagine that!).

Further, I would make a point of checking your math regarding “minority” defaults, especially in lower-middle and lower class neighborhoods. Your take doesn’t square with the facts.

[Allan from Fallbrook]

Brian: Uh, yeah, regarding CRA:http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

And before you accuse me of any sort of partisanship, that’s Thomas DiLorenzo writing on LewRockwell.com, a decidely non-GOP friendly website.

While SK might attempt to argue that CRA’s intent was to use proper lending guidelines and standards, the exact opposite happened (on a government program! Imagine that!).

Further, I would make a point of checking your math regarding “minority” defaults, especially in lower-middle and lower class neighborhoods. Your take doesn’t square with the facts.

[Allan from Fallbrook]

Brian: Uh, yeah, regarding CRA:http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

And before you accuse me of any sort of partisanship, that’s Thomas DiLorenzo writing on LewRockwell.com, a decidely non-GOP friendly website.

While SK might attempt to argue that CRA’s intent was to use proper lending guidelines and standards, the exact opposite happened (on a government program! Imagine that!).

Further, I would make a point of checking your math regarding “minority” defaults, especially in lower-middle and lower class neighborhoods. Your take doesn’t square with the facts.

[Allan from Fallbrook]

Brian: Uh, yeah, regarding CRA:http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

And before you accuse me of any sort of partisanship, that’s Thomas DiLorenzo writing on LewRockwell.com, a decidely non-GOP friendly website.

While SK might attempt to argue that CRA’s intent was to use proper lending guidelines and standards, the exact opposite happened (on a government program! Imagine that!).

Further, I would make a point of checking your math regarding “minority” defaults, especially in lower-middle and lower class neighborhoods. Your take doesn’t square with the facts.

[Allan from Fallbrook]

Brian: Uh, yeah, regarding CRA:http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

And before you accuse me of any sort of partisanship, that’s Thomas DiLorenzo writing on LewRockwell.com, a decidely non-GOP friendly website.

While SK might attempt to argue that CRA’s intent was to use proper lending guidelines and standards, the exact opposite happened (on a government program! Imagine that!).

Further, I would make a point of checking your math regarding “minority” defaults, especially in lower-middle and lower class neighborhoods. Your take doesn’t square with the facts.

[briansd1]

Allan, I read the piece you linked and the author provided no data on the default rates of CRA borrowers.

By examining the defaulted mortgages, one should be able to determine if a certain loan was a CRA loan. So I think that those who make the case that CRA is the problem should provide data.

Allan, banks are business people and they wouldn’t implement a business plan that would cost them more money than they can make (unless the individual executives could enrich themselves at the expense of the viability banks).

If there were incremental costs associated with the CRA, those costs have already been built-in to the program. At worse, it’s like Wal-Mart tolerating shoplifters. And even Wal-Mart makes money off the shoplifters overall, because occasional shoplifters are customers too.

The Act became law in 1977, so don’t you think that good business people had ample time to adjust to it? Come on, even in Russia and China where corruption is endemic, people find ways to make money.

What do you make of the fact that banks can make big profits from micro lending to the poor?

[briansd1]

Allan, I read the piece you linked and the author provided no data on the default rates of CRA borrowers.

By examining the defaulted mortgages, one should be able to determine if a certain loan was a CRA loan. So I think that those who make the case that CRA is the problem should provide data.

Allan, banks are business people and they wouldn’t implement a business plan that would cost them more money than they can make (unless the individual executives could enrich themselves at the expense of the viability banks).

If there were incremental costs associated with the CRA, those costs have already been built-in to the program. At worse, it’s like Wal-Mart tolerating shoplifters. And even Wal-Mart makes money off the shoplifters overall, because occasional shoplifters are customers too.

The Act became law in 1977, so don’t you think that good business people had ample time to adjust to it? Come on, even in Russia and China where corruption is endemic, people find ways to make money.

What do you make of the fact that banks can make big profits from micro lending to the poor?

[briansd1]

Allan, I read the piece you linked and the author provided no data on the default rates of CRA borrowers.

By examining the defaulted mortgages, one should be able to determine if a certain loan was a CRA loan. So I think that those who make the case that CRA is the problem should provide data.

Allan, banks are business people and they wouldn’t implement a business plan that would cost them more money than they can make (unless the individual executives could enrich themselves at the expense of the viability banks).

If there were incremental costs associated with the CRA, those costs have already been built-in to the program. At worse, it’s like Wal-Mart tolerating shoplifters. And even Wal-Mart makes money off the shoplifters overall, because occasional shoplifters are customers too.

The Act became law in 1977, so don’t you think that good business people had ample time to adjust to it? Come on, even in Russia and China where corruption is endemic, people find ways to make money.

What do you make of the fact that banks can make big profits from micro lending to the poor?

[briansd1]

Allan, I read the piece you linked and the author provided no data on the default rates of CRA borrowers.

By examining the defaulted mortgages, one should be able to determine if a certain loan was a CRA loan. So I think that those who make the case that CRA is the problem should provide data.

Allan, banks are business people and they wouldn’t implement a business plan that would cost them more money than they can make (unless the individual executives could enrich themselves at the expense of the viability banks).

If there were incremental costs associated with the CRA, those costs have already been built-in to the program. At worse, it’s like Wal-Mart tolerating shoplifters. And even Wal-Mart makes money off the shoplifters overall, because occasional shoplifters are customers too.

The Act became law in 1977, so don’t you think that good business people had ample time to adjust to it? Come on, even in Russia and China where corruption is endemic, people find ways to make money.

What do you make of the fact that banks can make big profits from micro lending to the poor?

[Author]

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